MODERNIZATION : Don’t Tinker with Indian Military’s way of life to fix Your Out-of-Control Fiscal Deficit

SOURCE:

https://theprint.in/opinion/dont-tinker-with-indian-militarys-way-of-life-to-fix-your-out-of-control-fiscal-deficit/539018/

 

Don’t Tinker with Indian          Military’s way of life to fix Your Out-of-Control                Fiscal Deficit 

Some half-baked economist came up with the 

specious argument to reform military life to save 

money — and CDS Bipin Rawat-led DMA 

swallowed the bait hook line and sinker.

MANVENDRA SINGH 

 9 November 2020.

hse Narendra Modi government flew a kite,

 its string handled by the Department of 

Military Affairs, to test conditions among the 

soldier community on the ground. 

The message displayed by the kite caused such severe turbulence in the fraternity of the fearless that it is unlikely to be a smooth ride for it from now on. Soldiers, those in service and veterans, have seen a slow erosion of their way of life. Perquisites have been chiseled away, one slice at a time. Chinese  WAY  of  Salami slicing of the border has been copied, aimed at service privileges. Pension and service reforms are the latest target, and anger is palpable among soldiers.

Military institutions in India have taken generations to mould and develop. Beginning from humble origins, much like their recruitment base, the military has successfully created its ethos and culture that is uniquely Indian. It is in fact a society that reflects the best of India, from inculcating a sense of belonging to this vast land to echoing its civilisational vision in a masterly way. Military life in India is deeply spiritual, completely professional, and uncompromisingly inclusive. Soldiers are drawn from Kupwara to Kanyakumari, Kutch to Kohima, and everywhere in between.

Each soldier is driven by a pride in the uniform, embodying a work culture that doesn’t accept laxity. Unlike any other Indian institution, the military doesn’t make concessions with prejudice or non-performance. The soldiers live, train, fight, and even die, for their pride, battalion and mother India. Living largely isolated from the vagaries of civilian India, they have developed systems and practices that sustain their unique way of life — an existence that is increasingly seen as peculiar and in need of tweaking. This episodic tinkering has suddenly got the soldier community ablaze because of an outlandish proposal to increase service age and pare down pensions.

Reform? Call it by its name

“[Chief of Defence Staff] General (Bipin) Rawat had made it very clear that the increase in retirement age would come through by 2021 as it was the need of the hour. Both the measures would lead to substantial financial savings as the increase in retirement age will also lead to lesser intake of officers at cadet level,” The Indian Express reported, citing a military source. A draft Government Sanction Letter (GSL) follows on the heels of earlier proposals that recommended a strange cadre review, some reversal of canteen entitlements, even changes in the much-valued Ex-Servicemen Contributory Health Scheme, functioning of military messes, bands, and regimental institutions including the hallowed quarter-guard.

The driver of all this tinkering is a ballooning pension bill that was estimated at 28 per cent of the last defence budget. Some half-baked economist came up with the specious argument to reform military life, so as to save precious money. The Department of Military Affairs (DMA) swallowed the bait hook line and sinker, without a thought to how it impacts the functioning life of a combat unit. By all estimations, the military is one institution that delivers on every task it is called upon. It is indeed the best value for money spent by the government. And yet it is the singular establishment that is expected to clip its perquisites so that an out-of-control fiscal deficit can be better managed. Under the guise of pension reform, this is yet another raid on a way of life that is celebrated nationwide.

Military reforms are always welcome if war-fighting capabilities improve. But such improvements can never succeed when they piggyback on financial setbacks to soldiers. They cannot help battle efficiency when a time-tested system is tinkered. They can only succeed when structures are created that extract the best from an effective institution and existing ethos. Neither of these two fundamentals can be raised overnight. But they can certainly be damaged even before the ink has dried on an order. If the Modi government wants to save money, it should begin with the vast leaky reservoir of rural development schemes. Every bureaucrat and politician in India knows the extent of the leakage, but they know nothing about military life, ethos, and morale.

    ---------------------------------------------------------------------------

The author is a Editor-in-Chief of Defence & Security Alert. Views are personal.

India And Defence Expenditure: A Challenge For Defence Economists

SOURCE:
http://www.eurasiareview.com/17032017-india-and-defence-expenditure-a-challenge-for-defence-economists-analysis/utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+eurasiareview%2FVsnE+%28Eurasia+Review%29

India And Defence Expenditure: A Challenge For Defence Economists – Analysis

                                      By 

                          Amit Cowshish

India's NS Kalvari at the Mazagon Dock Limited on the day of her undocking. Source: Indian Navy, Wikipedia Commons.

BY IDSA MARCH 17, 2017

The only sub-theme that vies for pride of place alongside the debate on the alleged shenanigans of an inept civilian bureaucracy is the gross inadequacy of defence outlays. Governments have come and gone since 1947, but the sluggish trajectory of annual defence budgets continues, interrupted only by pay commissions and wars.

It does not require any great power of prophesy to rule out a steep hike in the defence budget in the coming years. The history of the defence budget over the past seven decades should be enough to drive home this truth.

More specifically, the growth in annual defence allocations since 2014 only indicates that it is naive to expect that the gap between the demand projected by the Ministry of Defence (MoD) and the actual allocations made for defence in the union budget will soon be a thing of the past.

Defence analysts never tire of mentioning the year 2004 when the then outgoing government made a provision for a defence modernisation fund in the interim budget, seen till date as a bold step to address the problems besetting the modernisation of the armed forces. But it is the same political dispensation which, despite being in power now for almost three years, not only has not revived the defence modernisation fund but has also failed to cut the mustard when it comes to raising the defence expenditure.

There is a continuous lament over inadequate funding and this is invariably attributed to politicians and bureaucrats, widely believed to be impervious to the imperatives of defence and security of the country. Apart from being an unfair characterisation, this has served no purpose all these years and is unlikely to be much help in future.

If anything, this narrative has crowded out the academic discussion on how much should be allocated for defence and, more importantly, how could the government of the day meet the expectations of the defence establishment without an adverse impact on other competing sectors, such as health, education and infrastructure.

The dominant view among the strategic studies community in the country is that the defence budget should be pegged at a minimum of three per cent of the Gross Domestic Product (GDP). Going by this benchmark and without questioning its basis, the defence allocation for 2017-18 should be approximately Rs 2,31,310 crore more than the amount actually allocated in the union budget, excluding defence pensions for which a sum of Rs 85,737 crore has been allocated separately.

This is a huge gap to cover, especially if the fiscal and revenue deficit targets are to be met. The gap cannot also apparently be bridged just by reducing expenditure on other sectors. On the face of it, the government will have to raise its income substantially to be able to almost double the allocation for defence to reach the three per cent of GDP mark. Governments have evidently not been up to this task either because of the serious political cost of raising income through taxation or for other inexplicable reasons. This is where defence economists, and even think tanks, need to step in and suggest a pragmatic way out.

The question that arises every year when the union budget is analysed in seminars and in the media, but remains unanswered, is whether the Finance Minister could actually allocate more funds for defence without, at the same time, causing an adverse impact on other sectors, assuming no positive change in the estimated income. The alternate question would be whether the minister had more options for raising governmental revenues to the extent that allocation for defence could be raised substantially, if not to the extent of three per cent of GDP, without facing any difficulty in giving a rational explanation for rejecting the demand from other sectors for higher allocations.

To answer both the above questions, defence economists will have to deal with a more fundamental set of questions. What should be the pragmatically ideal level of funding? Whether the defence allocation should be fixed at a certain percentage of GDP? If so why? Or, would it be enough to meet the requirement projected by the MoD, irrespective of how much it works out to in terms of percentage of GDP and regardless of the method of costing adopted for working out the requirement.

The basic challenge for defence economists is to demonstrate that there are other feasible ways of skinning the cat during budget formulation. But the challenge is also inextricably linked with the need for rationalisation of defence expenditure, especially if manpower costs cannot be contained in any substantial measure.

There are indeed other steps, such as the creation of joint logistics and theatre commands that could potentially bring down costs and increase operational efficiency. But the thrust for these measures is unlikely to come from within the services or from the political class, unless independent and objective analyses by defence economists points to the imperative of adopting these measures and throws up a roadmap for bringing about these seminal changes.

Views expressed are of the author and do not necessarily reflect the views of the IDSA or of the Government of India. Originally published by Institute for Defence Studies and Analyses (www.idsa.in) at http://idsa.in/idsacomments/defence-expenditure-a-challenge-for-defence-economists_acowshish_140317

SOURCE:
https://www.defencenews.org/2017/03/pm-needs-parrikar-2-0-raksha-mantri.html

Why PM needs a Parrikar 2.0 as Raksha Mantri

                                     BY 

                      DEFENCENEWS

                                              by 

                                Nitin A Gokhale 

 MARCH 15, 2017

In 28 months, Manohar Parrikar as defense minister developed easy relationships with the top brass of the three Services as was rarely ever witnessed before. He threw caution to the winds and managed to pull the forces out of a downward spiral in operational capabilities.

Now that Manohar Parrikar’s return to Goa is done and dusted, the immediate priority for Prime Minister Narendra Modi will be to find an equally hard working, transparent and approachable Raksha Mantri for India.

Though Arun Jaitley, the perennial ‘go-to’ man, has been given additional charge of the defense ministry, surely he cannot be expected to handle two large and critical ministries simultaneously.

However, whosoever is the new occupant in South Block in the coming months will find it a hard act to follow since Parrikar, in his 28-month stint, had brought in a new sense of vigor and purpose in the largely moribund MoD.

Before Parrikar took over as defense minister, he had been variously described to me as a reluctant politician, an even more reluctant minister at the Center and an outsider in the power corridors of Delhi.

To my mind, after getting acquainted with him over the past two-and-a-half years, Parrikar can be best described as a simple man who is not a simpleton; a man of frugal habits who shunned all visible trappings of power and was quick to understand complex issues.

Parrikar Will Be missed at Defense Ministry

Those attributes not only allowed him to grasp the intricacies and complexities of the important ministry, but also enabled him to put his own stamp on the day-to-day functioning of the MoD.

There have been slip-ups and some embarrassments too because well-entrenched vested interests tried to undermine his authority.

I remember meeting him for the first time in February 2015 (before that, I had only heard of Parrikar as an unusual politician).

One of the questions he had was: “What, in your view, is the biggest challenge here?”

At first, because of unfamiliarity with him, I had thought of playing safe and gave a standard reply that, “It is a large, sensitive and important ministry and therefore not easy to understand quickly.”

But his easy manner encouraged me to be bolder and remark: “Your greatest challenge will be the status quo mindset that pervades through the civil and military bureaucracy. Everyone will tell you that such and such thing cannot be done because there has been no precedent to it. If you can overcome that trend, maybe you would have made a big start.”

READ  Post PMO letter, 4-lakh defence civilian staff to protest 'privatisation'

I cannot judge if Parrikar took that input (not advice) seriously, but whoever I came across since then — whether in the Services or in the defense industry — swore by Parrikar’s efforts to re-engerise the MoD and bring in more accountability.

This in itself is a big change because at the best of times, the MoD is a lumbering giant, slow to stir and act.

It is not only entrusted with the defense of the country but is also the administrative ministry for India’s nearly 15 lakh military personnel (Army, Navy, Air Force and Coast Guard).

It also has one of the largest budgets in the government. For 2017-18, for instance, it has been allocated Rs 359,854 crore ($53.5 billion).

Critics have quibbled over the comparatively low increase in the defense budget this year. But that is the least of the challenges.

Instead, reducing timelines for acquisitions, better and optimum utilization of available resources, bringing in more accountability and transparency in the MoD’s functioning and making sure most critical voids in India’s defense preparedness are made up in quick time, have been the focus areas in South Block.

But above all, the MoD under Parrikar saw to it that the prime minister’s Make in India initiative gets the necessary impetus in defense production.

Promulgation of Defense of Procurement Policy-2016 was the first step towards making fundamental changes in the way weapons platforms are acquired in India.

The Buy IDDM (Indigenously Designed, Developed and Manufactured) category, introduced in DPP-2016, now gets the topmost priority among six categories that constitute the new DPP, which is the guiding document for all defense purchases in India.

Make Indian, Buy Indian: Defense Minister’s Mantra

In effect, this means all those Indian companies who have the capability of designing and developing their products indigenously will from now on get the first preference in most purchases that the three armed forces undertake.

Under the new category for IDDM equipment, it will be mandatory for 40 per cent of the content to be sourced locally.

The new DPP has many fresh ideas designed to accelerate defense acquisitions while encouraging indigenous companies under the flagship program of Make in India.

READ  Devendra Fadnavis to become next Defence Minister and Chandrakant Patil to be new CM of Maharashtra?

For instance, in order to cut down delays, the DPP henceforth mandates that all Acceptances of Necessity of a particular platform will be valid only for only six months as against the 12 months deadline that it currently provides.

Moreover, no AON will be notified until it is accompanied by a finalized RFP (Request for Proposal or detailed tender). In essence, this eliminates one intermediate stage since notifying an RFP after an AON used to be inordinately delayed.

Prioritization of Projects Was The First Step

Defense acquisitions are expensive and since very little was purchased in the past five years, the backlog just added to the problem.

A review of proposed projects made over the previous five years found that the bureaucracy in the ministry — both civil and military — was sitting on some 400-odd big and small projects that were critical to the three armed forces. A thorough review revealed that nearly one-third of the 400-odd projects were now irrelevant. So they were discarded.

About 50 projects were accelerated since they were of critical importance.

Next, important schemes across the three services that needed immediate funding and implementation were identified.

The figures speak for themselves: The MoD cleared a total of 124 new contracts worth Rs 209,751 crores since the Modi government came to power.

These include artillery guns, attack and medium lift helicopters for the Army (Chinook and Apache helicopters from the US); frigates and mine counter-measure vessels for the Navy and Akash missiles for the Air Force.

Post-September 2016, when India conducted ‘surgical strikes’ against Pakistan, it seemed for a while that Pakistan may mobilize for a larger conflict,

India’s Cabinet Committee on Security authorized the three forces to make fast track acquisitions worth nearly Rs 20,000 crores making it one of the most productive years for the MoD.

This had to be done on priority because the previous government had neglected even the basic requirements.

The previous Comptroller and Auditor General report tabled in Parliament made for grim reading.

‘Stocking of ammunition even at “minimum acceptable risk level” was not ensured, as availability of ammunition as on March 2013 was below this level in respect of 125 out of a total of 170 types of ammunition.’

Also, in 50 per cent of the total types of ammunition, the holding was ‘critical’ — insufficient for even 10 days of fighting, the report added.

READ  Manohar Parrikar's sudden shift to Goa leaves 

 defence cos in a tizzy

This has now been corrected by making sure that ammunition for 10 days of intense fighting is always in stock.

Once that objective is achieved, the ministry will look at further replenishing the stocks.

The delegated financial powers for the vice-chiefs of the three Services and army commanders have been enhanced to allow speedier purchases.

This is a big change in the notoriously slow and opaque functioning that has historically besieged the MoD.

In another major decision, the government opened up the defence sector for FDI, allowing 49 percent FDI through the automatic route and up to 100 percent FDI on a case to case basis.

Also, the restrictions on what was ‘state-of-the-art technology’ has been reduced to ‘modern technology’. This would increase the number of defence companies investing in India.

Procurement and modernization of three services apart, the biggest decision by the Modi government was to grant the One Rank One pension — a 40-year-old demand of the veterans.

Although there have been some voices of disgruntlement on the issue, the fact is, this government showed the necessary political will and resolve to give due dignity to military veterans.

Significantly, the MoD has now allowed authorized, registered agents to represent companies and eliminate delays or cancellation of contracts because of anonymous complaints. Anonymous letters are now a no-go.

The ministry wants to use the power to ban a firm only in the rarest case. The previous government had indiscriminately blacklisted over a dozen firms, severely restricting the options of the forces to source equipment.

Despite Parrikar’s efficiency and good intentions, a toxic legacy left behind by a decade and more of lethargy and timidity under A K Antony will take sustained efforts by Parrikar’s successor to ensure that the MoD effectively discharges its duties towards securing the nation.

Half-done initiatives like choosing the strategic partners for making defense platforms in India, reforming higher defence management (appointing a CDS — even if 4-star), creating joint commands for space, cyber and special operations will have to be followed upon by Parrikar’s successor.

It is for Prime Minister Modi to choose the right man — or woman — to do that, and do it fast.

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