In a surprise move, the fledgling right-wing government in India entrusted it new Finance Minister Arun Jaitley with additional responsibilities of defense portfolio, kindling speculations that allocation of funds for the modernization programmes, which have been under stagnation due to corruption scandals and bureaucratic red tape, will be quicker.
The 61-year-old minister, a seasoned politician and a corporate lawyer, was quick to respond. “Speeding up the purchase of equipment required for their support are going to be priority areas as far as our government is concerned.”
“There is a perception that the acquisition process has slowed down in the last few years…We are certainly concerned. Therefore expediting them would be a matter of top priority,” Jaitley says. He didn’t elaborate, but was apparently referring to the acquisition of the 126 medium multi-role combat aircraft (MMRCA) and 197 light utility helicopters (LUH).
Several other important projects, mainly the acquisition of fighter aircraft, number of which are depleting in the Indian air force (IAF), attack helicopters, artillery and anti-aircraft guns for army, which weren’t bought during the last three decades, submarines, night fighting gear and a host of equipment upgrades, have been waiting for final approval for quite some time.
“There are set procedures in defense and we will have to ensure that acquisition takes place while ensuring there are no avoidable controversies,” the minister says, referring to several corruption charges involving various defense deals, which were signed during the previous regime.
The Indian air force (IAF) has taken most of the brunt from the defense minister’s go-slow work ethic. The delay in finalizing the contract to buy the MMRCA Rafale from French firm Dassault, which emerged the winner in January 2012 has forced IAF to extend the operational life of aging aircraft through mid-life upgrades.
A $3 billion proposal to acquire 56 transport aircraft to replace the air force’s antiquated Andover, or Avro, transport aircraft also has been delayed. Following the cancellation of the AW101 helicopter deal, the government has also put on hold the proposed acquisition of the LUH to replace the vintage Cheetah/Chetak fleets that undertake patrol, reconnaissance and casualty evacuation missions in forward locations and high-altitude areas.
The IAF, which is technically supposed to have 42 fighter squadrons, has only 34 squadrons, with each consisting of 20 aircraft. Six of these though are based on the aging MiG-21 fighters, which are on the verge of being phased out.
“Delay, indecision and lack of clarity in defense procurement have gone to seriously erode the combat fitness of the services. For instance, even as IAF continues to be handicapped by the problem of squadron depletion, the deal to acquire the MMRCA could never be finalized even two years after the aircraft emerged a winner in the closely contested tender. Incidentally, while IAF has sufficient number of heavier Su-30 MKI combat aircraft and the lighter Mirage-2000 and Mig-21 Bis in its fleet, it is lacking in medium range multi- role fighters,” says Radhakrishna Rao, Visiting Fellow at the think tank Vivekananda International Foundation.
Similarly, the proposal for the acquisition of 197 light observation helicopters for the Indian defense forces, which was taken up more than a decade back need to be given a practical shape without a loss of time. And the Indian Navy’s plan to acquire 16 multi-role helicopters has been in limbo for more than a decade now, Rao adds.
But original equipment manufacturers are pinning hope on the new dispensation to clear or finalize the pending projects.
“We are hopeful that the new government will accelerate the modernization process, continue to reform the defense procurement procedures, and take steps to incentivize even greater cooperation between the foreign OEMs and Indian companies, says Yves Guillaume, President India, Airbus Group, which has a strong footprint in India.
Similarly, another major equipment supplier Boeing hopes that “a clear mandate for the new government will enable them to take decisions faster.”
“Timely decisions will rekindle economic growth and strengthen India’s defense services. We look forward to working with the new government,” says Pratyush Kumar – President Boeing India.
Boeing has several projects awaiting approvals including the 22 Apache attack helicopters deal worth around $1.4 billion, and a project to supply 15 Chinook heavy-lift helicopters at an estimated cost of around $1 billion.
All of these high-priority acquisitions will require extensive budgetary support. With the defense budget languishing at less than 2 percent of India’s GDP — the interim budget for 2014-15 is pegged at 1.74 percent of the projected GDP — it next to impossible for the armed forces to undertake any meaningful modernization.
The defense establishment has now urged the new political dispensation for a 25% hike in its budget allocation for the current financial year, pointing to “operational gaps” in manpower, machines and infrastructure.
Though India increased its defense spending by 10% to 2.24 trillion rupees ($36.2 billion) in the financial year 2014-15 during the interim budget, the capital allocation earmarked to buy new arms and weapons systems has been increased only by a paltry 3.2% or 28.47 billion rupees to 895.87 billion rupees. The remaining 1.34 trillion rupees will go toward payment of salaries and other expenses of the armed forces. While the Indian air force has got the major chunk of the capital allocation with 162.71 billion rupees, that is just $2.6 billion; the navy received 128.56 billion rupees and the army had to be satisfied with a mere 23.57 billion rupees.
Allaying all concerns over how he will handle two huge ministries, the “caretaker” defense minister assures, “the government is expected to appoint a full-time defense minister soon. But till then, I will be coming to the Ministry of Defense every day to clear the backlog and take decisions. This is a very important ministry.”
“Russia-Pakistan contacts in this field pose no threat to the existing strategic military balance in the region and are not aimed against the third countries,” says the Russian Foreign Ministry.
