Gaming Military Money

ByLt Gen Prakash Katoch

12 Jan , 2015

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The report submitted by the Parliamentary Standing Committee on Defence to the Parliament on 22 December 2014 made little news. There were odd news items talking of its contents, mentioning the army running low on ammunition, soldiers posted in freezing places like Siachen and Leh sans boots and mosquito nets, and the country failing for over a decade to produce an assault rifle that meets the most basic requirements of the army.

The shocking highlights of the report are: IAF is down to just 25 fighter squadrons against a sanctioned strength of 42; the situation was very grim and national security was being compromised.

Specifically the Committee found: soldiers in high-altitude areas were short of nearly two lakh pairs of ankle leather boots; more than 13 lakh canvas boots were needed in same areas; one lakh mosquito nets were wanted; soldiers were awaiting 65,000 Balaclavas or masks to keep their faces warm; MoD had failed to furnish plausible information about how many soldiers have bullet-proof jackets with voids jeopardizing the lives of thousands of soldiers, and; while MoD seemed satisfied that equipment like night vision goggles are plentiful, the Army was not satisfied with the state.

The report says, “It appears that the Ministry is not taking the Army into confidence while doing its perspective planning.” The report warns that the shortage of ammunition means “it would not be possible for the country to sustain a war for a longer period.”

The above committee report further brought out that the DRDO, tasked with developing technology for the military, has failed since 1982 to produce an acceptable INSAS rifle, the standard weapon of the army. But that is not all and not only at the cutting edge troops.

The shocking highlights of the report are: IAF is down to just 25 fighter squadrons against a sanctioned strength of 42; the situation was very grim and national security was being compromised. India may have already lost its strategic edge over Pakistan in terms of fighter squadrons; IAF requires at least 45 fighter squadrons to counter a two-front collusive China-Pakistan threat; India’s fighter squadron strength will be reduced to just 11 squadrons by 2024.

There are serious shortages of submarines in the Navy as well as equipment and weaponry for the Army; funding for the Mountain Strike Corps is inadequate (no funds allocated in current year) and it is being raised with only ‘war wastage reserves’; inadequate number of bullet-proof jackets is endangering lives of thousands of soldiers; crucial proposed defence procurements languishing could affect national security in big way – 37 cases of procurement are pending at 13 different pre-Contract Negotiation Committee (CNC) stages.

During the last 15 years only one submarine was inducted in July 2000 while five submarines were de-inducted.

Time taken at each stage is sufficiently more than what is accorded by DPP. With 27 cases lying at post CNC stages, 64 cases of capital procurements are pending; permitting important acquisitions to languish implies compromising national security; from defence expenditure at 2.41 percent of GDP in 1999-2000, there has been continuous slide to the present 1.78 percent of GDP; of the 14 conventional submarines of the Navy, most are over 20 years old, reaching the end of their service life. 18 more submarines are planned though existing force level is much less with most vintage and old.

During the last 15 years only one submarine was inducted in July 2000 while five submarines were de-inducted; availability of battle tanks is very low while voids are also being filled with MBT Arjun, and; after 14 years of development the INSAS rifle produced by DRDO was sub-standard. To say that the report is a shocking indictment of the MoD, the DRDO and the military procurement procedures would be an understatement. It also focuses on complete lack of strategic thinking, strategic policy formulation, and unaccountability and indifference on part of MoD towards the military and national security. But then what is so different from the leaked letter dated 12 March 2012 by the then Army Chief General VK Singh to then Prime Minister Manmohan Singh, highlighting among other things that India’s security may be at risk with tanks running out of ammunition, air defence equipment becoming obsolete, and the infantry lacking critical weapons, exhorting the Prime Minister to take speedy corrective action.

Not that such letters have not been written periodically by Service Chiefs as also Chairman COSC besides periodic briefings to the Prime Minster and the Defence Minister and MoD bureaucrats every six months during the Unified Commanders Conference and Army Commander Conferences, in addition to written monthly, quarterly and annual reports on the state of the equipment held.

…official website of the Ministry of Commerce and Industry admits that 50 percent of defence equipment currently held by our military is obsolete…

But this is not about discussing military shortages even though the official website of the Ministry of Commerce and Industry admits that 50 percent of defence equipment currently held by our military is obsolete, the proportion of state-of-the-art equipment also needs to grow from its current level of 15 percent to 30 percent, and the current cycle including acquisitions drafted under the long-term integrated perspective plan (LTIPP), is expected to include procurements worth US$ 100 billion by 2022. It is a different issue that the Defence Budget allocations and chalking out the LTIPP in absence of a National Security Strategy, defining National Security Objectives and a Comprehensive Defence Review itself wreaks of lack of strategic planning and mismanagement of India’s defence and security in the extreme. Additionally, while the LTIPP is based on a hypothetical allocation of 3 percent of the GDP, defence allocations have never really touched that mark. Even post the Kargil Conflict and public exposure to massive equipment shortages in the Army, the one time high 1999-2000 Defence Budget allocation was made at 2.41 percent of the GDP. However, there has been a continuous downslide since then.

Compare what has been stated in report by the Parliamentary Standing Committee for Defence and state of the defence equipment given in the Ministry of Commerce and Industry website with the projections versus allocations against capital expenditure by the three Services in the current Defence Budget (allocations standing at mere 1.78 percent of the GDP): Army projected a requirement of Rs 41,936 crores but were allotted Rs 26,533 crores; Navy projected a requirement of Rs 28,253 crores but were allotted Rs 22,804 crores though committed liabilities were already Rs 4,599 crores; Air Force projected a requirement of Rs 62,406 crores but were allotted Rs 33,711 crores though committed liabilities were already Rs 2,645 crores. The very first glance will tell you that the Army and Air Force have been generally allocated 50 percent of their projections while the Navy has been given more due to spate of accidents and state of the naval fleet. It does not matter if the IAF is down to 25 fighter squadrons against an authorized strength of 42 squadrons. But then MoD is not accountable for the state of the military in the first place, the Service Headquarters only being ‘Attached Offices’.

…one estimates is that a monumental figure of some Rs 12,000 crores is likely to be surrendered by the MoD on 31 March 2015…

What generally gets glossed over is that despite the inadequate defence budgets over the years in sharp contrast to the LTIPP widening the capability gap between the PLA and our military exponentially, thousands of crores of Rupees have been surrendered annually by the MoD barring an odd year when budgetary allocations were fully utilized. Jaswant Singh, when officiating as Defence Minister had mooted the idea of carrying forward unexpended defence funds into the next fiscal but the idea was quickly throttled. The MoD actually has been standing out as the only ministry to surrender money at the end of the fiscal year. That this was by design left little doubt with a former Vice Chief of Army Staff having been told by a friend in MoD (Finance) that they actually have to submit a quarterly report as to how much funds they ‘can’ surrender at the end of the financial year for use elsewhere.

In such backdrop a vital issue in the above report by the Parliamentary Standing Committee on Defence becomes very significant – the delays in procurement; 37 cases pending at 13 different pre-CNC stages, 27 cases lying at post CNC stages, and 64 cases of capital procurements pending. If that was the state in December 2014, how do you expect that the MoD is not working on surrendering portion of the Defence Budget despite the dire state of voids and obsolescence? In fact, one estimates is that a monumental figure of some Rs 12,000 crores is likely to be surrendered by the MoD on 31 March 2015 under the usual cover of passing on the blame to the military for slow movement of cases. If that were to happen, the bureaucracy would succeed in taking ‘Gaming Military Money’ to a new high. Hope the Defence Minister is live to these machinations and is able to prevent them.