India to involve its Private sector in Defence production
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]he Narendra Modi government’s endeavors to involve the domestic private sector in defence production will go a long way strengthening national security. It will also give the much-needed boost to manufacturing.
A.K. Antony, who was defence minister for eight years in that wasted decade, presided over a crumbling military-industrial complex.
The “broad contours” of the long-awaited “strategic partnership (SP)” policy to boost the Indian private sector’s role have been finalized, reported The Times Of India (May 21). “The defence acquisitions council (DAC), chaired by defence minister Arun Jaitley, also gave the green signal to the Army to go ahead with its long-term plan to induct three squadrons (39 choppers) of attack helicopters for its three ‘strike’ corps, among other modernization proposals.”
It may be recalled that it was the Bharatiya Janata Party government in 2002 that had allowed the participation of domestic companies in defence. At that time, Union minister Pramod Mahajan had underlined an anomaly: India had faith in foreign companies, which supplied arms and armaments, but not in Indian majors for the same, which were not allowed to strengthen the defence sector. At that time, the government also allowed 26 per cent foreign direct investment of FDI in the sector. Now, 100 per cent FDI is allowed with government approval.
Everything, however, came to a standstill during the 10 years of UPA rule (2004-14). A.K. Antony, who was defence minister for eight years in that wasted decade, presided over a crumbling military-industrial complex. He is an honest politician, but his tenure witnessed a series of scams, the fallout of which severely affected procurement and badly hurt defence preparedness.
The requirements of military—tanks, fighter jets, warships—mounted while Antony was in office. No howitzers were purchased after 1987; it is only recently that they got inducted into the Army. The acquisition of new submarines got delayed. When he demitted office, the armed forces had a shopping list with $100 billion. The military analyst, Rear Admiral (Retired) K. Raja Menon, called him the “worst defence minister ever.”
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]hat was a bit harsh, because V.K. Krishna Menon, Jawaharlal Nehru’s alter ego, will any day win that position hands down. For he was a traitor, while Antony was merely incompetent, but that’s another story for another day.
Instead of viewing private players with suspicion, the government wants their role to increase both in terms of their capabilities and their contribution to defence production.
What made the matters worse during UPA rule were Antony’s socialist leanings. He did little to restructure eight defence public sector undertakings (DPSUs), 39 ordnance factories, three defence shipyards, and 52 DRDO laboratories. Typically, he despised the private sector. This resulted in India’s reliance on defence imports rising to almost two-thirds.
If there is one area in which the Modi regime has done well, and infinitely better than what the previous government did, it is defence production. Instead of viewing private players with suspicion, the government wants their role to increase both in terms of their capabilities and their contribution to defence production. At present, they contribute less than 5 per cent to the procurement. Simultaneously, the government is removing preferential treatment, like fiscal sops, given to DPSUs.
The main takeaway of the recent DAC meeting was the SP policy under the Make in India thrust of the Modi government, says the Times of India (TOI) report. This “initially opens up four major segments of fighter jets, helicopters, submarines, and armored vehicles (tanks and infantry combat vehicles) for private sectors players.”
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]T[/dropcap]hese developments augur well for national security. However, everything is not hunky-dory. To begin with, for almost eight out of 36 months of the Modi government, the Ministry of Defence has been headed by a part-time Minister, Jaitley, who is surely not the most competent Cabinet member. As Finance Minister, his record is less than stellar; and he knows even less about defence matters.
And, finally, the entrenched interests are playing spoilsport.
Second, the red tape is yet to loosen. “Bureaucratic apathy is among the biggest hurdles to the government achieving its Make in India targets,” Laxman Kumar Behera, a research fellow who tracks military expenditure at the New Delhi-based Institute for Defence Studies and Analyses, told India Today in February this year.
And, finally, the entrenched interests are playing spoilsport. The TOI report talked about “the stiff resistance put up by the public sector lobby against the SP policy.”
On the whole, however, the sense of purpose and the vigor infused into the defence ecosystem by the Modi government will stand national security in good stead.
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2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.