Historic decisions to be made in defence reform

by Ajai Shukla

Business Standard, 6th June 14

The military’s worrying equipment shortage presents an immediate problem for the BJP-led government. There is an urgent need to expedite the stalled procurement of equipment that is essential for the military’s combat effectiveness. The army desperately needs artillery guns, light helicopters and ammunition reserves; the navy must immediately have torpedoes, towed array sonar, anti-missile systems and submarines; while the air force urgently requires mid-air refuelling aircraft, airborne early warning and control systems, and Tejas light fighters to replace the MiG-21s and MiG-27s that must be retired.

But the defence ministry must make haste slowly, carefully considering what procurements are genuinely urgent. The need to appear purposeful on defence must not allow the ill-considered procurement of weaponry that is higher on cost than on benefit. Even if the new government were to significantly raise the defence budget from the current level of 1.74% of gross domestic product, the pay-out for extremely costly platforms in the pipeline --- like the Rafale medium fighter, for example --- would be so high as to starve other less talked about, but more urgently needed, systems.

In prioritising acquisitions, the defence ministry would find that every service --- the army, navy and air force --- provides compelling reasons why its equipment is utterly vital. In truth much of it is, but the ministry is ill equipped to make these procurement choices. In any country serious about defence, an apex tri-service commander would make these choices and present a final proposal. The government should immediately appoint such a commander, thereby easing its dilemmas, signalling seriousness about defence reform and, crucially for long-range planning, creating a single-point commander who would tailor requirements to budgets. This would also fulfil a key promise made by the Bharatiya Janata Party, or BJP, in its election manifesto.

The government must realize that a strong defence is structured, not bought, and that our military requires multiple reforms. Like elsewhere in the economy, defence planning involves trade-offs. A larger force means greater expenditure on salaries, pensions, cantonments, medical benefits, travel and administrative expenses. Whittling down the force progressively will leave more for firepower, which is cheaper and more effective than men with bayonets. Integrated, tri-service structures cost less than redundant single-service structures and create greater synergies in fields like training, communications, early warning and in battlefield functions like air defence.

The BJP’s election manifesto will provide limited help in deciding the next steps on defence. The document is largely a charge sheet that accuses the UPA of allowing border intrusions by China, Maoist attacks, the presence of “Pakistan backed terror groups”, illegal immigration from Bangladesh, a shortage of air force fighters and multiple accidents involving naval warships. There are populist promises --- greater benefits to veterans and a national war memorial. The BJP manifesto promised both to “increase the R&D in defence, with a goal of developing indigenous defence technologies”, as well as the “fast tracking of defence purchases.” Emerging defence economies like South Korea, Brazil and Turkey have realised that these two are contradictory. Every weapon system that is purchased leaves one less for indigenous industry to develop. Even the weapons that one buys should be contracted with one eye on a role for indigenous industry --- in building sub-systems, maintenance, repair and overhaul. If that requires liberalising the foreign direct investment rules for defence industries, subject to a maximum of 49 per cent, the government should move quickly on that path. It must realise that procurement and reform choices it makes this year will reverberate for at least a decade.