A blueprint for cost-effective defence management

As a follow-up to the presentation of the annual Budget, the standing committees of Parliament are now tabling their reports before the two Houses, which is a precursor to detailed discussions piloted by the respective ministries. The Standing Committee on Defence has, accordingly, considered the Demands for Grants of the Ministry of Defence. The panel submitted its reports to Parliament on March 16, covering the entire gamut of the defence budget.

While this is an annual exercise, with an indifferent track record of informed discussions, the reports tabled this year are of special significance due to a number of reasons. The security situation in the neighbourhood as well as globally remains unstable and volatile. In sync with the ground realities, the thrust is on indigenisation and corporatisation in defence production while also encouraging private players.

While the reports are quite exhaustive in their content, a look at the major issues covered gives an adequate flavour of the concerns expressed and the recommendations made. Giving an overview of the budgetary grants, the committee observed that during the year 2021-22, the allocation made to the Ministry of Defence was Rs 3,68,418.13 as crore, as against the projections of Rs 3,47,088.29 crore, while the actual utilisation was only Rs 2,66,558.69 crore up to December 2021. Further, it expected the ministry to take appropriate measures to expend the unutilised funds in order to enhance the acquisition of the latest state-of-the-art weapon systems and other capital-intensive projects, including infrastructure, and ensure that no funds are surrendered at the end of the year.

The committee has recommended that the ministry should seek additional grants at the supplementary grants/revised estimates (RE) stage if the schemes/projects get affected by the curtailment of funds at the budgetary estimates stage, as capital budget is utilised for developing capabilities which are most essential in the current security environment on our northern and western borders. The committee has rightly observed that the modernisation of the defence forces involves the acquisition of new weapon platforms, technologies and systems to upgrade and augment defence capabilities and is a continuous process, based on the threat perception, operational necessities and technological changes, to keep the armed forces in a state of readiness to meet the entire spectrum of security challenges.

In its previous reports, the committee had recommended making the capital budget ‘non-lapsable’ and ‘roll-on’ in nature. On being apprised that a draft Cabinet note for non-lapsable defence modernisation fund was under consideration, the committee urged the ministry that approval may be accorded expeditiously so as to fructify its creation at the earliest.

Taking note of the fact that capital procurement of defence equipment is undertaken from various domestic and foreign vendors, the committee emphasised that with the increasing focus on self-reliance and promotion of indigenous industries, the import of defence equipment should decrease. Ways and means should be devised so that the newly created defence public sector units (replacing the earlier Ordnance Factory Board), DRDO and private industries worked in tandem to not only produce import substitute products but also expand their export potential so that the country becomes a net exporter of defence equipment.

The committee observed that there was relatively lesser spending for the modernisation activities of the Army. Taking into account the reason given as indigenisation thrust, the committee reiterated that while modern weapon systems manufactured by Indian companies should be procured, decisions should be based on the current threat perception and any compromises were not desirable.

While examining the demand in respect of the Air Force for 2022-23, the committee has mentioned that due to the two-front threat perception, an enhancement of air power was of paramount importance. The procurements of the Air Force being largely capital-intensive, the committee recommended additional allocation under the capital head at RE or supplementary grants stage. The firepower of the Air Force is proportionate to the fighter squadrons in its orbat (order of battle). However, the fighter squadron strength cannot be counted merely on the number of aircraft but also their weapon-carrying ability, lethality and range to fly and strike. Therefore, no compromises in terms of firepower and technology should be made while inducting fighter jets into the Air Force.

The Indian Ocean Region (IOR) throws up multiple security challenges as nearly 1,70,000 ships transit through various choke points and almost 13,000 ships are in the IOR at any given point of time. The committee was of the considered view that continued endeavour for modernisation is the quintessence of modern warfare and newer technologies have to replace existing conventional war-fighting capabilities. Therefore, capital funding has to be adequate for ensuring that the Navy embarks on an unhindered modernisation drive.

The panel also observed that the revenue budget is used for operations, training, maintenance, repairs and day-to-day functioning of the Navy and any inadequacies on this account may lead to accidents and casualties.

The committee noted that the Department of Military Affairs has been entrusted with the onerous responsibility of spearheading reforms within the military establishment towards enhancing synergy and jointness among the services and ensuring optimum utilisation of resources. In this context, a renewed impetus has been provided to the establishment of integrated theatre/joint commands to complete the process in a time-bound manner. The gaps and interstices in the creation of integrated joint commands need to be resolved expeditiously so that the services adopted a concerted approach in the event of any threat perception/war and resources and infrastructure were synergised.

The Standing Committee on Defence has entered into a fairly exhaustive exercise which needs to inform the subsequent debates in Parliament. But, more importantly, it should serve as a guide for the Ministry of Defence and the Department of Military Affairs in the execution of policy and expenditure of funds allowed to be appropriated for this by the Parliament. The committee has the advantage of considering a subject in detail in a non-partisan manner and being able to discuss issues with senior representatives of the armed forces and the ministry.

The US Congress has committees that have acquired a great degree of expertise in areas of defence, foreign policy etc. and serve as valuable aids in the execution of policy. The reports of the Standing Committee on Defence can serve a similar purpose in the defence management of the country.

Mid-course corrections at the RE stage are of vital importance to prevent any slippages in the capacity-building of the forces. It is imperative that these reports remain a reference benchmark during the entire financial year and are not filed away for posterity.