Pressing the reset button in MoD

by Ajai Shukla

Business Standard, 27th May 14

Defence Secretary RK Mathur, like his counterparts in other key ministries, will soon make a presentation on the defence ministry (MoD) to Prime Minister Narendra Modi. In his recommendations to the PM, Mathur --- a farsighted bureaucrat who was badly hamstrung by the former defence minister’s paralysing conservatism --- will choose between incremental and radical change. He could submit to bureaucratic caution and recommend process improvements that are easy and acceptable: streamlining procurement, promoting indigenisation, etc. This safe approach might include a suggestion to raise the defence budget from its current 52-year low of 1.74 per cent of GDP. Yet, timid measures would not yield the transformative change that the new PM seeks.

Instead, Mathur must be visionary. He should take to the PM just five simple measures that would create or catalyse dramatic improvements across the wider defence arena. It would be pointless recommending a larger defence budget; anyone can improve defence by throwing vast sums of money at it. Mathur should focus on getting more bang for the buck. Given the almost criminal inefficiency of our defence processes, this can be achieved without fuss.

India’s fundamental defence problem is the army’s bloated manpower, the cost of which leaves little for modern equipment. The army chief says defending the mountainous border needs large numbers. True but China, with far longer unsettled borders slashed the People’s Liberation Army (PLA) by 10 lakh in 1985; another 5 lakh in 1997, and 2 lakh more in 2003, to a size not much larger than India’s. In contrast, our army is expanding, adding 80,000 soldiers this decade, when half the army’s current budget already goes on salaries. Adding bayonets is useless when that leaves no money for equipment like artillery? The defence secretary must recommend time-bound manpower reduction targets, right-sizing over this decade, from 12 lakhs today to a 9 lakh strong army.

These smaller numbers can successfully defend our far-flung borders provided they can move quickly between sectors. Currently every sector must be heavily manned in case of a full-scale attack. A poor border road network precludes the quick reinforcement of a threatened sector. A time-bound road-building plan would allow many sectors to be lightly held, saving manpower costs that could buy heavier and more accurate firepower. To meet road-building targets, an expanded Border Roads Organisation (BRO) must be placed under the MoD (it is currently under the ministry of road transport and highways). The defence minister must chair the apex Border Roads Management Board, which was once chaired by Jawaharlal Nehru himself. Border states must be incentivised, through border area development funds, to play their role in land acquisition.

The third suggestion, which would be enabled by a better-connected border, is to radically outsource the army’s administrative functions. Today, based on the dated assumption that wars are fought mainly in uninhabited areas, the army’s administrative functions are discharged by expensive combat soldiers. Military salaries and lifetime pensions are paid to legions of “combatant tradesmen” who wash, sweep, cook and cut hair. In an equipment heavy armoured division, every sixth combatant is a mechanic, performing a role that civilians can discharge more cheaply and better. Other soldiers supply rations, clothing, spare parts and fuel, jobs that most armies have privatised almost entirely. Today, even a waiter in an officers’ mess is a full-time soldier, entitled to pay and pension for life.

Privatising these functions would improve the military’s “tooth-to-tail ratio”, cut salary and pension bills, create economic opportunities for local populations in border areas who would be hired by private service contractors. It would also “civilianise” defence, creating a new genre of combat service contractors.

Fourthly, Mr Mathur should place national interest over political and IAS apprehensions and recommend the appointment of a chief of defence staff. The CDS, a five-star rank officer, appointed for a three-year tenure, is badly needed to coordinate and oversee manpower and equipment planning of all three services. Today, with nobody to mandate joint-service aims, priorities or roles, the army, navy and air force jostle for money and turf, wasting scarce funds in duplicating capabilities. Furthermore, without an overall commander to prioritise between competing service demands, the tri-service 15-year equipment plan is a worthless wish list that, in pandering to all three services, goes far beyond the actual availability of funds. Finally, a CDS would provide the military with unified command in war, and the ministry with single-point advice in peace.

Finally, to create a viable defence industry the MoD must consciously assume a “market maker” role. For almost a decade, Mr Antony has shied away from any role in developing indigenous companies into serious defence players. Instead, he reduced defence procurement and production policy to a decision matrix, devoid of judgment and discretion. The MoD must overtly and unabashedly favour indigenous production, while remaining impartial between public and private sector. To maintain even-handedness, the MoD must unburden itself of the nine defence PSUs, transferring them to the Ministry of Heavy Industry. To promote high technology, the MoD should identify innovative Indian companies and focus on their development. Controls must be loosened on defence exports to help these companies become global players, benefiting from economies of scale. At least 100-150 “Make” category projects must be kicked off, providing these companies the framework to grow. Technology entrepreneurs should be additionally seeded through the DARPA model, in which the Pentagon’s Defence Advance Research Projects Agency funds small projects that are directed towards futuristic war. DARPA’s successes include creating the Internet; but Indian technologists have no one to turn to.

None of these proposals are difficult for the new government, given its mandate and vision for change. Yet it is disappointing that a full-time minister has not been announced for the MoD. Arun Jaitley would find it difficult to function effectively as a part-time defence minister, given the many technicalities and challenges involved. It is to be hoped that Mr Modi will appoint a full-time defence minister soon.