This article examines India’s defence expenditure over the past ten years. In so doing, it provides a public finance perspective to explain the recurring resource crunch being faced by the Ministry of Defence (MoD). The article reasons that a substantial augmentation of resources for the MoD in the past has faced stiff barriers due to lack of tax buoyancy and also the political, economic and other exigencies that have led to greater public spending outside the traditional areas of expenses, including defence.
Defence procurement in India needs to adopt a mix of procurement avenues in which the indigenous solutions, foreign equipment and futuristic R&D continue together in a balanced manner. Considering that piecemeal solutions are not effective in the long term, there is a need to adopt a ‘Systems Approach’ to come up with a holistic solution which is enduring and progressive.
In the current geopolitical situation, India needs to increase the indigenous defence production and build a strong military force armed with technologically advanced defence equipment to create a robust security framework that meets the requisites of modern warfare.
The GFR 2017 permit individual ministries to issue detailed instructions to address the needs and complexities of procurement carried out by them. The question is whether those principles and rules come in the way of the Ministry of Defence evolving a more efficient procurement procedure that meets the armed forces’ aspirations.
If existing procurement procedures are a hindrance in acquiring state-of-the-art defence materiel expeditiously, a case needs to be made out, based on demonstrable drawbacks of the existing system for a detailed blueprint of what system should replace it.
The Ministry of Defence has taken significant steps in recent times to boost domestic defence manufacturing and increase the role of the private sector to reduce dependence on imports and achieve self-reliance.
Defence of India is a multi-dimensional responsibility involving coordination with not only organisations within MoD, but also several external departments and agencies. Irrespective of whether the subject of defence of India is assigned to DoD or DMA, it is the defence minister who is responsible for the subjects allocated to the ministry.
There is a need to formulate a composite policy that focuses on indigenisation in high priority technology areas, shedding the notion that it must necessarily result in savings. A more modest and focussed mission-mode approach to indigenisation can produce better results.
Defence Procurement in India: A Historical Perspective
Defence procurement in India needs to adopt a mix of procurement avenues in which the indigenous solutions, foreign equipment and futuristic R&D continue together in a balanced manner. Considering that piecemeal solutions are not effective in the long term, there is a need to adopt a ‘Systems Approach’ to come up with a holistic solution which is enduring and progressive.