SRINATH RAGHAVAN
THE NDA government has been slow in coming to grips with the problems of defence policy, in part due to the absence of a full-time minister in the initial months of the government. The appointment of Manohar Parrikar as Raksha Mantri injected a much-needed dose of dynamism to the defence ministry. Parrikar has on several occasions stated that he wants to expedite defence procurement even while adopting transparent processes. In his very first meeting of the Defence Acquisition Council, he gave the go-ahead for the long-stalled procurement of artillery systems. He has also been looking to revise the existing policies in order to give a boost to the indigenous defence industry in India. More recently, he has averred the need for institutional reforms and integration in the three services.1
The fact that the defence minister is seized of these matters is to be welcomed. At least it is a refreshing stylistic departure from the somnolent silence that shrouded the ministry under the previous government. Yet, the scale of the challenges facing this government is little short of staggering. The entire gamut of defence policy – from organization and training of the armed forces to procurement and manufacturing of defence equipment – needs systematic repair. These can no longer be addressed by rhetorical fixes or band-aids. Indeed, any attempt to duck the difficult problems will only set the government up for more dire ones down the road. The prime minister projects an aura of decisiveness: some of this could usefully be directed towards defence policy.
Let’s start with the problems of organizational and structural reform. It is nearly a decade and a half since the Kargil Review Committee and the subsequent Group of Ministers (GoM) submitted their recommendations for national security reforms. About three years ago, another committee led by Naresh Chandra examined why the recommendations of the GoM were not fully implemented and suggested a new road map for reforms. Unless we want to perpetuate this practice of decennial enquiries into why the preceding decade was wasted, it is imperative that the government swiftly grasps the nettle and tackles the thorniest questions.
No question has been more controversial than the appointment of a Chief of the Defence Staff (CDS). The GoM’s recommendation for the creation of a CDS reflected the lack of integrated planning and operations between the services during the Kargil War. In fact, this is a problem that has plagued the armed forces in almost every conflict since 1947. The appointment of a CDS as the single-point military advisor to the Raksha Mantri was expected to usher in top-down integration among the services and better coordination between the services and the government. The previous NDA government created a new joint headquarters of the Integrated Defence Staff (HQ IDS). But it baulked at appointing a CDS and instead appointed a Chief of Integrated Defence Staff (CIDS) who would run the HQ IDS until the CDS was appointed.
This half-baked solution continues to date. To be fair, HQ IDS has managed to bring a degree of coherence to issues like procurement and joint doctrine. But this is hardly adequate. More importantly, it has allowed the political leadership to perpetuate an illusion of reforms while continuing to resist the appointment of the CDS. Then again, in the early years after the GoM report, the services themselves were a divided house on this question. In particular, the air force resisted the creation of a CDS – apparently on the grounds that it would pave the way for institutional domination by the army. This came handy to political leaders and bureaucrats in deflecting questions about their own unwillingness to institutionalize the system. Towards the end of the UPA-II government, the three service chiefs jointly wrote to the prime minister expressing support for the creation of a CDS. The only thing holding the government back is the ever-present elephant in the room: the politicians and bureaucrats concerns about strengthening the institutional role of the military.2
The NDA government has been considering alternatives to the creation of a CDS. The option that has the most traction appears to be the appointment of a permanent Chairman of the Chiefs of Staff Committee with a fixed tenure. This was the line taken by the Naresh Chandra Committee. Under the existing system, the chairman’s tenure tends to be a short one of a few months. This is because the senior-most serving chief is appointed as chairman. By giving the chairman a fixed term of, say, two-years, it is hoped that he will have enough time to work on key issues of integration between the services. The attraction of this model is, of course, the avoidance of a separate CDS who would sit on top of all the chiefs in hierarchy. Another variant on this option might be to appoint a separate CDS with fixed tenure but to give him only restricted powers over the other chiefs – on such issues as procurement, planning, doctrine and so on. This would leave the chiefs free to operationally run their own services.
Any institutional solution along these lines is unlikely to deliver the necessary levels of integration. If the CDS has no (or limited) operational control over the services, then his ability to function as the single-point military advisor to the government will be undoubtedly circumscribed. At best, it will amount to an incremental improvement on the existing HQ IDS. Worse still, it will yet again create the illusion of progress and delay real reforms for years at end. The idea that such reforms should be imposed gradually or piecemeal is seriously mistaken. In most countries that have achieved institutional integration, the process has been driven politically from on high.
What we need is simultaneous reforms for integration among the services and between the military and the defence ministry. To begin with, the CDS must be empowered fully. There should be no doubt about his being superior in the chain of command to the service chiefs. The CDS must aim not only to integrate staff functions such as planning and procurement, but also operations and logistics. For a start, he must look to establish integrated supply and logistics commands for the services – as a prelude to the creation of integrated regional/functional commands. The service chiefs should prepare to relinquish operational control over the services and become what their titles suggest: chiefs of staff. The chain of command should run from the Raksha Mantri through the CDS to the integrated commanders.
To ensure integration between the services and the government, civilian and military officers must be cross-posted to the defence ministry, the CDS staff and the service headquarters – and eventually in the integrated commands. This is essential to achieve a harmonious pattern of civil-military relations. Currently, civil-military relations have been vitiated from both ends. The military feels that political control has been supplanted by bureaucratic control – that too by officials who have scant understanding, never mind expertise, of military matters. The military, for its part, has sought to keep the political leadership out of its turf by insisting on a wide measure of operational and organizational autonomy. The upshot has been suboptimal for all concerned.
Take the issue of procurement which the RM so often speaks about. One of the major problems with the existing process lies in the formulation of ‘Qualitative Requirements’ that translate the operational needs of the armed forces into detailed specifications for acquisition. These problems could be effectively handled by setting up an integrated capability development unit – comprising of military officers, DRDO scientists and civilian experts – in the HQ IDS. After all, the IDS was set up precisely to achieve this kind of integration. Returning to the path of institutional reform will need full-blooded measures. It would be a pity if this government perpetuates or aggravates the problem by using palliatives.
Institutional integration apart, the defence minister must take a more direct interest in the operational readiness of the armed forces. Manohar Parrikar’s predecessors have tended to tick the box by turning up at the finale of large military exercises. But the real problems lie in the domain of military education, especially for officers. Our training establishments aim at imparting narrow professional skills. The focus is on churning out officers who can command companies, battalions and brigades, or those who can perform staff duties at various levels. There is practically no attempt to give the officers a sense of the larger contexts – strategic, political and international – in which the armed forces function. It is only at the highest training establishment, the National Defence College, that senior one-star officers get exposed to some these issues. This is too little and too late.
This outmoded approach to training impacts on the quality of human capital at levels in the services. If civil-military integration at the top is essential to ensure optimum strategic preparedness, then we need senior military officers who have some understanding of international relations and politics – beyond whatever they pick up by following the news. At lower levels too, it is important that officers understand the environment in which they are operating and the consequences that flow from their actions. In the wake of recent terrorist attacks in Jammu and Kashmir, for instance, junior officers have vented their feelings via social media that they were being expected to fight a war using the principles of maintaining law and order. It is difficult to imagine a greater misapprehension about the context in which they are being employed.
The quality of officers attracted by our services is comparable to those in any other country. But our systems of training fall rather short of preparing them for the challenges of the 21st century. Thoroughgoing reform of military training must be on top of the RM’s agenda. Apart from overhauling existing institutions and methods, he has to ensure that the institutions now being created cater to the requirements of the twenty-first century.
Take the Indian National Defence University (INDU) which has been several years in the making. It is expected that the bill establishing the INDU will soon be introduced in Parliament. But the government is oblivious to the deeper challenges of creating a first-rate apex military training institution. It has been decided that all faculty members from the services should have doctoral degrees. But little has been done to create a bench of officers with strong academic credentials in international relations, military history or strategic studies. The government must earmark and release officers for a period of three to five years to acquire a research degree. And it must fund their doctoral programmes at the best universities abroad.
Let’s face it, none of our universities – including the best ones like the Jawaharlal Nehru University – have a half-decent PhD programme in these subjects. Creating the requisite ‘software’ for the INDU will need advance planning and allocation of resources on the part of the government. To assume, as we currently do, that service officers can do doctoral degrees in this or that university, either part-time or on a couple of years of study leave, is a delusion that will destroy the INDU before it even takes off the ground.
A clear-eyed approach is also needed on the one issue that the government appears most interested in: indigenous defence production. Speaking at the Aero India Show in Bengaluru in February, the prime minister observed that the defence industry was ‘at the heart’ of the ‘Make in India’ programme. By increasing the share of domestic procurement of military equipment from 40% to 70% in five years, he claimed, India could double the output of its defence industry. More significantly, Narendra Modi noted that the Indian private sector would have to play a much larger role in this transformation of our defence industrial base.3
The prime minister’s decision to give a fillip to the private sector is laudable and overdue. Some initial moves have already been made. The cap on FDI in defence has been raised from 26% to 49%. Investment from foreign institutional investors has been allowed up to 24%. It is no longer mandatory to have a single Indian investor with at least 51% stake. Industrial licenses have been dispensed with for some items. Yet, much more needs to be done if our domestic production and private sector participation are to approach anything close to the levels envisaged by the government.
For a start, the categorization under the Defence Procurement Procedure needs to be considered afresh. While increasing focus on ‘make’ and ‘buy and make (Indian)’ is important, it will not automatically harness private sector participation. In the latter category, for instance, Requests for Proposal (RFP) have been circulated to foreign manufacturers with the condition that they choose an Indian partner. Yet Indian companies, including the private sector, that have the requisite capability have not been considered for the RFPs apparently owing to their lack of experience in delivery. This begs the question of how the Indian private sector is expected to acquire experience in the first instance.
A related problem is the use of direct or indirect nomination of defence PSUs or ordinance factories. This too loads the dice against the private sector. The government should do away with this practice: all contracts should be opened up for bidding. The government should also take on board a suggestion made by the Kelkar Committee almost ten years back to identify certain firms based on their technical, managerial and financial strength as ‘champions’ or ‘Raksha Udyog Ratna’ and circulate RFPs for major systems to these firms.
This model has worked well elsewhere. In fact, a committee constituted by the government and led by Probir Sengupta identified 13 Indian firms that could be designated along these lines. But eventually the government baulked at the idea of being seen as favouring some private companies over others. This is a misapprehension, for only a few companies will in fact be capable of producing major systems. To create a ‘level playing field’, the government will have to provide other incentives for the private sector – especially small and medium enterprises – to participate in other sectors of the defence industrial base such as assembles, spare parts and components. We should learn from our experience in manufacturing of auto components where SMEs have flourished despite the presence of the behemoths. Transfer of technology to SMEs must also be provided by way of the offsets required of foreign manufacturers.
More broadly, the regulatory regime for private sector participation in defence production needs a host of changes: total elimination of licensing; removal of the differential and regressive tax and duties treatment for Indian private industry vis-à-vis the defence PSUs and foreign manufacturers; easing the availability of capital, land and infrastructure; and ensuring better planning and strict implementation of offsets. Additional incentives such as those provided to Special Economic Zones and infrastructure industry should also be extended to private defence manufacturers.
These measures (and more) have been underscored by a host of committees that have gone into these questions. The government appears to be alert to their importance. It should now work systematically to bring about these changes.
The larger challenge is to attract FDI with technology transfer. Merely increasing the FDI limit to 49% is unlikely to be sufficient to ensure this. For a start, New Delhi may want to consider creative options to circumvent the problem of foreign producers being majority stakeholders. This could be done by ensuring that the control of the entity cannot be transferred without the concurrence of the Indian government. More importantly, the government must recognize that FDI in defence does not work as in most other sectors. The fact remains that most countries have export control laws that regulate the participation of defence manufacturers in ventures abroad. Strategic partnerships are therefore crucial to unlocking the doors for meaningful FDI in defence.
New Delhi will have to take some tough-minded calls regarding which relationships it wants to emphasize as far as defence production is concerned. For instance, the United States has the most advanced defence technology, yet is cagey about deals that involve substantial transfer of technology. The India-US Defence Technology and Trade Initiative has been talked up quite a bit. But consider the four ‘pathfinder projects’ for joint development and production announced during President Obama’s recent visit: next generation Raven Unmanned Aerial Vehicles; intelligence and reconnaissance modules for C-130J aircraft; mobile electric hybrid power sources; and chemical-biological warfare kit for soldiers. The Americans evidently feel that Indian companies do not have the capacity to absorb higher levels of technology. In any event, these projects are risible when compared to the joint development projects undertaken by India with Russia: a supersonic cruise missile and a fifth-generation fighter aircraft.4
The management of strategic partnerships abroad is as important recasting the regulatory framework at home. If defence production is indeed at the heart of ‘Make in India’ – a policy that in turn is central to Narendra Modi’s hopes for the economy – then the government has to focus on integrating its efforts at both ends. More importantly, policy measures to promote an indigenous defence industrial base need to be dovetailed with reforms of higher defence and security institutions. The government has the rare opportunity to take an architectural and integrated view of the necessary reforms. Gradualism or halfhearted measures that can be spun out as substantive reforms will set the stage for problems whenever the next serious external crisis breaks out.
Footnotes:
1. ‘India may soon get a General no. 1 to boost tri-service integration’, Times of India, 14 March 2015.
2. For a sharp analysis of these issues see, Anit Mukherjee, Failing to Deliver: Post-Crisis Reforms 1998-2010. Institute for Defence Studies and Analysis, New Delhi, 2011.
3. Text of the speech is available at http://pmindia.gov.in/en/news_updates/text-of-pms-address-at-aero-india-show/
4. On the former, see A. Sivathanu Pillai, The Path Unexplored: Success Mantra of Brahos. Shree Book Centre, Mumbai, 2014.
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