Reshaping Defence Spending; Restructuring Acquisitions Agency; Evaluating Private Participation :: Mandate of Defence Reforms

New Delhi: Defence Minister Manohar Parrikar , Chief of Army Staff, General Dalbir Singh Suhag,Vice Chief of Naval Staff Vice Admiral P Murugesan and Chief of Air Staff Air Marshal Arup Raha paying homage at Amar Jawan Jyoti on the occasion of Kargil Vijay Diwas  in New Delhi on Sunday. PTI Photo Atul Yadav (PTI7_26_2015_000041B)

In a rather daring move, Defence Minister Manohar Parrikar has made a serious bid for introducing root-and-branch reforms in the Indian defence establishment. He has convened a set of independent committees led by some of the finest known for their impeccable integrity to bring about substantial reforms.

Reshaping Defence Spending
With just 25 % of the defence budget available for equipment modernization,  a 12-member body, headed by Lt Gen (Retired) DB Shekatkar – will recommend measures to “rebalance” defence allocations between revenue and capital expenditure. The committee will look at how to cut down manpower without reducing the military’s combat capability.

The minister has got fairly convinced that the army carries too much flab, which can be trimmed seeking a greater reliance on the civilian establishment. The committee will also evaluate the sensitive issue of combat units, including the requirement for a new mountain strike corps that would add another 50,000 troops to the army.

The committee includes several military officers to lend it credence and weight in ascertaining a strategically important area.


Restructuring Defence Acquisitions

The former petroleum secretary, Vivek Rae, would lead the 9 member committee comprising of civilians as well as military men to study “the setting up of a Defence Procurement Organisation in the Government of India.” The committee is required to suggest the functional mandate of the proposed procurement body, its organisation and staffing, and to suggest how autonomously it could function. Vivek Rae, who served as the defence ministry acquisitions chief, is intimately aware of the flaws of the current organisation, which numerous commentators have criticised as hamstrung by caution and procedure, most of them laid down by the ministry itself, in successive defence procurement procedures (DPP).

The representation from the private defence industry, is being termed as a possible shortcoming of this committee but considering the fact that this committee is just to create the transparent rules of the game, the private sector would have been dropped for plausible conflict of interests.

Evaluating Private Participation in 5 Strategic Areas
A third group of sub-committees would look into the “strategic partners” (SPs) model for private sector participation in “Make in India”  recommended by various expert committees earlier.

Under the proposed model, Strategic Partners were to be selected in ten fields of technology, based on laid down criteria. Incidentally, the private sector companies that were not making the criteria had stalled the selection process, arguing with some justification that the criteria were arbitrary. This process has now been revived, but pared down to just five technology areas.

Each of these five areas comprising of

  • armoured fighting vehicles;
  • aircraft and helicopters;
  • submarines;
  • ammunition, including smart ammunition; and
  • “macro process management of issues”,
  • will be considered by a separate sub-committee.


It has been over 15 years now since the private sector was first allowed into defence production in 2001 under NDA-1. The nature and modalities of participation could not get established in crystal clarity since then. In 2006, the Kelkar Committee had made larger recommendations, which most experts had regarded as workable and fair. However, the Raksha Udyog Ratna model of private sector participation it proposed was not implemented.  Meanwhile, Eight DPPs, the most recent one being DPP-2016 part-released this year, have failed to galvanise private sector participation.

This latest bid by the Defence Minister is certainly a welcome move to cleanse off decades of rot and redundancy which has set into the defence establishment, which is generally untouched considering the strategic nature of the sector. A Mr. Clean who is non-negotiable on national interests with due capability to steer through the contours of technology & strategic affairs, he should be able to sail through and make his mark.

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