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Sunday, 28 October 2012

From Today's Papers - 28 Oct 2012
Indian Defence Production Policy 2011: Need for Reinvigoration
 India’s Defence Production Policy was released by the Ministry of Defence 22 months ago. This policy is a very incisive statement of the government’s intent to promote self-reliance in defence and a fairly lucid enunciation of the approach to achieve that objective. The policy envisages an annual review of the progress made during the year in self-reliance. No such review has, however, been carried out so far. Consequently, there is no official assessment of the impact the policy has had on the process of self-reliance in defence since the policy was promulgated.

The void has been filled by subjective assessments, which are not very encouraging, especially in regard to the tactical and operational dimensions of the policy. Whether or not these assessments are correct, the fact remains that much of the enthusiasm with which the policy was launched has waned and, but for the customary statements about the resolve to achieve self-reliance, no concerted and sustained effort is apparently being made to ensure that the policy is put into practice.

The policy seems to be in a state of drift. A thorough and honest review of the progress made so far is essential for arresting this drift and for course correction. The stated objectives of the policy should be a good starting point in this regard. These are to:

• Achieve substantive self-reliance in design, development and production of equipment, weapon system and platforms required for defence in as early a time frame as possible.
• Create the conditions conducive for the private industry to play an active role in this endeavour.
• Enhance the potential of small and medium enterprises (SMEs) in indigenization. And
• Broaden the defence research and development base of the country.

There is a need to develop strategies to achieve these objectives. Some of the issues that might need to be looked into are suggested here.

The very first objective of achieving substantive self-reliance in design, development and production of equipment, weapon system and platforms requires a more nuanced definition of what constitutes ‘substantive self-reliance’, transparency about the future needs of the defence services, clarity about the entry points for the public sector and the private industry, and an eco-system conductive for such entry. The very concept of self-reliance would need to be carefully defined. It needs to be considered whether the pursuit of self-reliance, overlooking its cost-effectiveness in specific projects, would be a good idea. The Long-Term Integrated Perspective Plan (LTIPP) 2012-27, approved by the Defence Acquisition Council on April 2, 2012, would contain the Services’ vision about their future requirements. Recognising the importance of sharing the future needs of the defence services with the industry, the Defence Procurement Procedure (DPP) 2011 provides that the headquarters of the Integrated Defence Staff will bring out a public version of this document outlining the technology perspective and capability roadmap covering a period of 15 years. This document is required to be widely publicised and made available on the website of the Ministry of Defence. More than six months after the LTIPP was approved, the public version is nowhere on the horizon. This assumes significance because the Defence Production Policy says that based on the approved LTIPP, equipment, weapon systems and platforms required 10 years and further down the line will by and large be developed, integrated or made within the country. The industry can start planning only if it knows what to plan for.

There is lack of clarity about the entry points for the public sector and the private industry. There continues to be a predisposition to nominate the Public Sector Undertakings and the Ordnance Factory Board as the production agency. Though DPP 2011 provides that the production agency could be selected from any of the public or private sector entities, the proviso that such selection could be made on the basis of inputs from the Department of Defence Production and, if required, the Defence Research and Development Organisation, gives an opportunity to these organisations to garner the new projects. Quite often they succeed because in the prevailing circumstances it is risky to press for nomination of a production agency from the private sector. The intent to achieve self-reliance by roping in the private sector seems to have made little dent on the tendency to root for the Public Sector Undertakings and the Ordnance Factory Board for acquiring technologies for production and maintenance of new equipment, weapon systems and ammunition. The Ordnance Factory Board continues to be routinely nominated for producing ammunition for new weapons systems also, despite the known fact that it has serious limitations in meeting the already existing demands of the Services, apart from quality control issues in some cases.

In fact, there are no guidelines for identifying a private entity for nomination as a production agency. When faced with this problem in the Avro-replacement proposal of the Indian Air Force, the modus vivendi of letting the prospective bidder select the Indian partner for manufacturing the aircraft in India was worked out, but even this approach was circumscribed by prescribing the eligibility conditions for selection of the Indian partner by the foreign bidders. The inability of the Department of Defence Production and the Department of Defence Research and Development to let go of the privilege of calling the shots in nomination of the production agency seems to have played an important role in this. The potential of the Avro-replacement model as a means of strengthening and widening the indigenous manufacturing capabilities has not been fully realised. In fact, its potential cannot be fully realised unless the rules of the game for entry of the private sector are clearly laid down, unshackling the selection from all unnecessary governmental control.

It is a big challenge to create an eco-system conducive to strengthening of the indigenous capabilities in design and development, manufacture and maintenance of equipment and weapon system. There are issues related to the limit on foreign direct investment, taxation and export licenses that need to be addressed to create a congenial eco-system. It would help if the Ministry of Defence were to assume the leadership role and provide a single-window solution for the defence industry, rather than leaving the private sector entities to fight their own battles with a host of government departments and agencies. This calls for a paradigm shift in the approach to encouraging participation by the private sector in the effort to achieve self-reliance through indigenisation.

The Small and Medium Enterprises (SMEs) have their own set of problems. One of the recommendations made by the Kelkar Committee was the creation of separate funds for technology development and for assistance to the SMEs. The Defence Production Policy also reiterates its commitment to create a separate fund for providing the necessary resources to the public and private sector, including the SMEs as well as academic and scientific institutions, to support research and development of defence equipment and systems with cutting edge technology. This commitment to create a fund is somewhat surprising. The recommendation made by the Kelkar Committee had been considered in the past but at that time it was not considered feasible. However, instead of creating separate funds, budget heads were opened in the year 2010-11 itself to provide budgetary support for technology development under the ‘Make’ procedure and assistance to the SMEs. A modest allocation of Rs. 89.31 crore has been made in the budget for the financial year 2012-13 (as against actual expenditure of Rs. 81.95 crore in 2010-11) for the projects of the Indian Army and the Indian Air Force that involve technology development but no allocation has been made for assistance to the SMEs since the time this budget head was opened in 2010-11. The Indian Navy has had no expenditure under either of the two budget heads. The scheme for providing assistance to SMEs was drafted by the Department of Defence Production a couple of years back but it was not promulgated. There is a need to address the concerns of the SMEs.

The Defence Production Policy promised that the government would simplify the procedures under the ‘Make’ category in such a manner that it enables indigenous design and development by the public and private industry in a faster timeframe. Some changes are contemplated as a part of the exercise that has been underway since February 2012 to amend the Defence Procurement Procedure. Whether the proposed amendments would result in the promised simplification of the procedure is not known but, in any case, the amendments to DPP 2011 need to be expedited.

A comprehensive review of the progress made after the promulgation of the Defence Procurement Policy is overdue. It needs to be undertaken immediately to identify the factors that are coming in the way of smooth implementation of a well-intentioned policy promulgated nearly two years ago. It would be advisable to engage the private sector in identification of the problems and possible solutions to those problems. A task force had been set up by the government on defence modernisation and self-reliance under Shri Ravindra Gupta, former Secretary Defence Production. The committee has submitted its report. Any review undertaken at this stage must also take into account the recommendations made by the task force. As of now, the report has not been made public but doing so would generate a healthy debate and consequently serve the cause of refining the defence production policy and evolving strategies for its implementation.

US supports modernisation of Indian Army, Navy

The US has come out in strong support of modernisation efforts of Indian Army and Navy, calling it a "good investment" as India contributes to peacekeeping across the world and stability of Asia-Pacific.

"We would certainly have an interest in security and stability across the Asia-Pacific region," US Deputy Secretary of State William Burns said.

His remarks came in response to a question after he delivered his remarks on 'The United States and India: A Vital Relationship in a Changing World' at the Center for American Progress.

Burns' statement in support of Indian military modernisation assume significance as they have come at a time when the United States has expressed its concerns about the modernisation of the Chinese military and navy and sought more transparency on the part of Beijing in this regard.

"... whether it's China or India or the United States, looking out over the next few years, each of us obviously have a lot of very important domestic priorities to sort through in terms of economic modernisation ...and that gives us, I think, a common interest in a stable external environment," he said.

"And what that means is that each of the key playersacross the region can make security contributions to that to ensure, for example, that maritime commerce is preserved. So that's why the modernisation of the Indian navy or the Indian military in general is a good investment, I think, in that kind of stable Asia-Pacific," Burns said.

It is "a good investment" in India's contributions to peacekeeping around the world and its ability to respond to disasters or catastrophes that occur, he said.

"And so for all those reasons we think it's in our interest to deepen that defence partnership with India," he said in response to another question.

"The only other thing I'd add is that I think it's important to measure it not just in terms of defence sales – you know, we've done about USD8 billion worth of sales in

recent years; I think we could easily double that over the next few years -- but the reality is that what we also want to do is look at areas like co-production and co-development, joint research, so that we build a defence partnership that goes beyond -- important as they are -- defence sales," Burns said.

As India's military influence grows, Burns said, "our

hope is that our partnership can become one of our closest in

the region. We're united by our experience of tragedy and

terror, shared threats in Afghanistan and a shared vision for

a peaceful and open Asia-Pacific.

"We're proud of our robust counter-terrorism cooperation, which simply didn't exist until a few years ago and now extends to all levels of policy and law enforcement."

Since 2008, India has bought over USD 8 billion in US defence equipment, up from effectively zero less than a decade ago, Burns said.

"When we complete delivery of India's USD4 billion C-171 aircraft, our combined fleet will represent the largest airlift capability in the world. These are indispensable assets for global response to crisis and disaster. Last year's delivery of the C-130J Hercules came just in time for rescue operations after the Sikkim earthquake," he said.

"Our military services conduct some of the largest joint exercises with India, including over 50 formal engagements in the past year. As our defence relationship evolves from buyer-seller to co-production and joint research, it will be ambitious, and we ask India to be equally ambitious in sharing this vision of a new security partnership with the United States," Burns said.

On the issue of Iran, he said, the US believes that India undertook a "smart long-term strategy" by reducing import of oil from Iran, adding that both New Delhi and Washington share a "strategic aim" with regard to Tehran's nuclear ambitions.

"I don't think India needs much convincing about the strategic dangers of Iran acquiring a nuclear weapon," Burns said.
IAF VVIP helicopter deal: Army Brigadier under scanner over USD 5 mn bribe demand
New Delhi: A Brigadier of the Indian Army is under the scanner for allegedly demanding bribe of USD five million from an Italian company in a helicopter deal, with the Defence Ministry on Saturday seeking details from the government there and assuring "strong action" against the culprits.

The allegations were levelled against the Brigadier, who is currently posted at the Officers' Training Academy in Chennai, during an ongoing probe in Italy into the alleged involvement of Finmeccanica in paying kickbacks to secure defence deals including the Indian contract for 12 VVIP choppers.

Finmeccanica is the parent company of AgustaWestland and is under the scanner after a few arrests were made in Italy including personnel suspected to be the middlemen in the Indian contract. "The Defence Ministry has asked the Italian government and concerned agencies through the External Affairs Ministry to provide the name and relevant documents relating to the alleged involvement of a Brigadier in the ongoing process for the acquisition of 197 helicopters for the Army. We will take strong action against offenders detected through this probe," Defence Ministry said in a release.
The allegation have been levelled against the officer in a letter allegedly sent by an AgustaWestland official in India to his superiors in Italy saying that the Brigadier was seeking USD 5 million for facilitating the deal in their favour. The letter was submitted by Italian prosecutors in a court there.

The Ministry officials said the Italian government has been requested to provide details of the existence, if any, of any middlemen of any individual or Indian entity in the above contracts. Agusta Westland has already won the Indian deal worth over Euro 560 million for supplying 12 AW101 VVIP choppers while its bid was rejected in the 197 choppers deal where Eurocopter and Russian Kamov are still in the race.
Indian Army Srinagar 92 Base Hospital gets a 16 slice CT Scanner
In an effort to keep up with the technology and as and endeavor to provide exemplary medical care to soldiers of Chinar Corps during war and peace, 92 Base Hospital has installed a 16 slice CT Scanner. CT Scanner was dedicated to the brave soldiers of the Chinar Corps by Lt Gen OM Prakash, GOC Chinar Corps on 25 Oct 2012, during a small function held the Base Hospital where the newsletter ‘Chinar Capsule’ was also released.

While addressing the all ranks during the event, GOC mentioned that caring for the injured during wars has always been a difficult and challenging task for the medical services of the Armed Forces and no hospital epitomizes it better than 92 Base Hospital. It is the only zonal hospital of the Armed Forces Medical Services located in combat zone. With nearly 600 beds, this hospital has steadfastly provided exemplary medical care to the troops and their families deployed in the Kashmir Valley, aptly living up to its motto-‘Touching Hearts, Saving Lives’. The hospital has also been treating some serious cases of JKP, CRPF, Para Military Forces and the civil populace. Our effort should be to incorporate the best infrastructure and technology available in the world.

Since the time of its raising, 92 BH has provided unparalleled and exemplary medical care and has rendered an unsurpassed level of combat medical care delivery during numerous operations like OP RAKSHAK, OP VIJAY and OP PARAKARAM. The exceptional professional skills and selfless devotion towards patient care displayed by the staff of this hospital have resulted in hitherto unmatched survival figures and a big boost to the morale of the fighting troops.

Keeping itself abreast with the modernization, recent advances in the field of medicine and striving to provide best possible combat medical care to the soldiers of Chinar Corps with state of art equipment, a 16 slice CT Scanner has been installed at 92 Base Hospital. This hi-tech machine is an important diagnostic tool for a variety of clinical conditions and for quick assessment of battle wounded soldiers specially those with bullet and multiple splinter injuries
Indian Army at the mercy of arms dealers and lobbyists

    In December, the Indian Army will test assault rifles from five foreign firms in a Rs.2,500-crore contract to buy a new rifle. The contract is crucial because it will decide the weapon that nearly 1.2 million infantrymen in the world's second largest army will carry for the next two decades. When the Army announced the tender in November 2011, it electrified the global arms industry. Besides the initial order of 65,678 Multi Caliber Assault Rifles (MCAR), the tender also calls for licence production of over 100,000 rifles in Indian ordnance factories, taking the deal to over $1 billion (Rs.5,500 crore). It is, officially, the world's largest small arms procurement in recent times.
    Gun manufacturers in Russia, US, Europe and Israel took notice. In Delhi, arms agents began calculating the commissions from the deal-between Rs.100 crore and Rs.250 crore-nothing compared to other scams, but a substantial sum nevertheless.

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