India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this the Defence Economic and Industry Centre was created in 2006 to promote research on various economic aspects of India's defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed forces and Industry) on a range of issues. In this brief period, the Centre has organised over 10 events, including a major international seminar on Defence Acquisition in July 2011. Presently the Centre is preparing a Detailed Project Report (DPR) for the Ministry of Defence for setting up a Defence Acquisition Institute in India.
Major Focus Areas of the Centre includes:
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April 3, 2014
If we have no qualms about importing from other countries why cannot we buy ammunition from our own private sector companies? While restrictions could apply to production of small arms and ammunition, for large calibre arms and ammunition there is a case for permitting the private sector companies to chip in.
March 25, 2014
The recommendations of a committee set up in 2009 to review the delegated powers were accepted by the Defence Minister in December 2010 but soon thereafter these were held in abeyance because of the perceived fear that there was a large scale misuse of the delegated powers and that implementation of committee’s recommendations would result in excessive delegation of powers.
March 19, 2014
It is difficult to understand why the MoD should bind itself by asking for request for information (RFI) that cannot be compared across all the proposals. What would constitute ‘capability’ and ‘requisite infrastructure’ to license produce the aircraft is a matter of subjective interpretation and therefore, it would become difficult for MoD to assess whether the information provided by a bidder establishes that he/she has the requisite capability/infrastructure.
March 14, 2014
On Feb 14, 2014, MoD issued an office memorandum about operationalization of a Offsets Facilitation Cell. This is the perhaps the first positive step in a long time and the MoD needs to be complimented for it. However, absence of an operating procedure, clarity about the exact nature of mandate and guidelines for those who will man the cell could turn out to be a bane for this wonderful initiative.
February 23, 2014
The 10 per cent growth in the interim defence budget although looks impressive from outside, it has a poor outlook on the modernisation front. Much of the hike in the interim budget is consumed by the increase in salary, leaving very little to meet the defence modernisation requirements.
February 14, 2014
Projecting a demand which cannot be met is as pointless as allocating budget that is barely sufficient to sustain the armed forces and other departments of the MoD. The persistent neglect of this aspect of defence management is taking its toll not only on the stock of ammunition held by the armed forces, notably the Army, but also on serviceability levels of the equipment.
February 4, 2014
It is commonly viewed that in an election year, the incumbent government is tempted to present a populist budget. In that scenario, the MoD would have reasons to be unhappy, particularly so when the modernisation requirement of the armed forces has reached a stage which is now contingent upon substantial additional resources to remain on course.
January 22, 2014
The Defence Procurement Procedure 2013, as also its earlier versions, does not define an Indian company. Some would argue that the answer is very simple: any entity registered in India under the Companies Act, 2013 or any other relevant statute and operating with a valid license, where such a license is required, qualifies as an Indian company, enterprise, institution or establishment.
The Occasional Paper examines India's defence innovation performance, especially of the Defence Research and Development Organisation (DRDO) and the defence industry. The paper argues that the innovation performance of these two players is constrained by lack of a higher organisational structure which could provide direction and required thrust to the indigenous R&D.
January 6, 2014
While there was perhaps no option for the MoD but to do what it has done, it would be naive to expect the seller to acquiesce in forfeiture of the bank guarantees, recovery of the sums allegedly paid in violation of the PCIP (assuming that it will be possible to recover this amount) and to simply take the three helicopters back without demur.