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A few themes keep recurring in press coverage of military procurement: Indeed a corporate military complex in India appears to be in the offing.

Most of the data and information employed here are drawn from the print and web media, Government documents available in the public domain, and reports by consulting firms and policy institutions. This piece is an attempt to make sense of the present and changing institutional as well as policy framework regarding military acquisitions and expenditure.

Specifically, it looks at:. Thus defence is one of the largest heads of expenditure of the central government, amounting to more than one-sixth of the total. If we take defence and police together, more than one-fifth of Government expenditure is on the military and security establishment.

Besides, a portion of spending on atomic energy, space, and science and technology should also properly be classified under defence, raising the total even further. Defence expenditure can be divided into two parts, revenue and capital.

The first refers to recurring expenses, such as salaries and pensions, uniforms, provisions, fuel, and so on. The second refers to spending on durable assets, such as land, building, and weapons.

The budgeted capital outlay for defence in is Rs 94, crore, and capital acquisition for the three services is projected to be close to Rs 77, crore. Over time a massive military research and production complex in the Government sector has been created in the country.

See Appendix I for frequently used military related abbreviations in this article. The ordnance factories and DPSUs together employ more than 2 lakh personnel and have annual revenues close to Rs 50, crore, while DRDO employs 5, scientists and about 25, supporting personnel with an annual budget of more than Rs 15, crore see Appendix II for skeletal details of the public sector military establishment.

What are the actual achievements of this giant complex? It is still far from being delivered to the IAF, perhaps by several years, in spite of some Rs 17, crore having been already spent on its development. By the time all the promised aircrafts are to have been delivered to the IAF and Navy init is reported that the price tag would go up to Rs 55, crore in present terms 7.

Reports suggest that Tejas has a 60 per cent indigenous content, and the project has been tot 5000 bonus en live webinars to license some critical technologies.

However, there have been areas of spectacular technological failure, most glaring of which is the Kaveri engine itself, on which Rs 2, crore has been spent. Late last year, DRDO decided to recommend to the ministry the winding up of the Kaveri engine programme, ending the project of equipping Tejas with a home-grown power system 8. The second Pokhran blast led to sanctions by the Western powers, and several such collaborations came to a standstill for some time.

Left to its own devices the IAF would have preferred outright import; to date it continues to make changes in the specifications for the LCA. Without inside knowledge, it is difficult to pinpoint the reasons for the Tejas failure. A report by Vivekananda International Foundation a powerful think tank very close to the RSS, from which Prime Minister Modi has drawn his principal secretary and National Security Adviserascribes the failure of Tejas to the constantly-changing specifications Failure, however, is not restricted to sophisticated technologies, which understandably take time to master.

Since the defence public sector complex has been engaged in this exercise, with repeated failures see Appendix IV. A recent report concludes: Here we are not commenting on the social usefulness of those technologies. This fact may give us a clue to the real political-economic problems in the development of indigenous capabilities, even though those problems may at times manifest themselves as bureaucratic bumbling and incompetence.

One of the clear winners of the recent military imports has been the US. The deal involves off-the-shelf purchase of 16 aircraft, with the balance to be made in a facility in India established by the foreign vendor with an Indian private sector partner of its choice. The foreign vendor selected was to find an Indian partner to produce 40 aircraft within India.

As yet only the Airbus-Tata combine has responded. Rafael-IAI had been proscribed in following allegations of having bribed senior Indian officials, including a Navy chief, in the previous NDA regime, to secure tot 5000 bonus en live webinars missile tender in Against this background, there have been repeated attempts in recent years to modify the policy regime with the stated aim of boosting indigenous military production.

In military production was opened for the private sector, and FDI to the extent of 26 per cent was allowed as well. The idea is to force foreign suppliers to compensate for imports, at least partly, by sourcing locally and thus helping develop manufacturing and related capabilities within the country.

For example, if a foreign arms vendor were to receive an order of Rs 1, crore from India, it would have to place orders in India for Rs crore towards meeting that order. Offsets did not bring in the expected inflow of FDI and joint venture JV arrangements, exports and long term business partnership in design, development and production of high end products.

Inthe DPP made a substantial leap from the earlier stipulation of direct offsets, by including dual-use civil aerospace products, internal security, and training as legitimate offset items.

We welcome the new revisions on broadening the aperture of offset credit to include civil aviation and internal security. The synergy of these areas will directly benefit the indigenisation of the aerospace and defence industry. The foreign investment that offsets were to direct into the indigenous development and fabrication of high-tech radars, night-vision devices and missile tot 5000 bonus en live webinars now seems headed for airliner seat upholstery and carpets; rubber panels for baggage claim conveyer belts; cabin crew training; and passenger management systems In any case, given the expediency of buying the hardware from the foreign suppliers and complete dependence on them, the offset policy has been followed at tot 5000 bonus en live webinars in letter, but not at all in spirit.

A sample of gross violations:. Lockheed Martin offered, as an offset, a simulator at an exorbitantly inflated price, and the acquisition council granted them offset credit for doing so. While sourcing tot 5000 bonus en live webinars radar equipment from France, Thales discharged its offset obligations by buying accommodation tents including toilets, kitchens, air-conditioners and microwaves from a Gurgaon-based company, and by purchasing motorcycles and vehicles for the radar crews.

In the 16 offset contracts concluded between andvalued at Rs 18, crore, off-the-shelf equipment without any value addition worth Rs 3, crore was procured from Indian offset partners. What is significant is that the MoD tot 5000 bonus en live webinars per cent owned subsidiaries of foreign vendors also to be treated as Indian offset partners. By the next yeara whole set of further relaxations were brought in the offset policy allowing transfer of technology as an offset item, relaxation of the period in which it has to be done, possibility of passing off the offset commitments to sub-vendors, and even relaxation in the 30 per cent requirement of the total value of offset.

In further efforts towards indigenisation, inthe UPA government proposed additional changes in the policy regime, according first priority to the Indian public and private sector for military procurements. Preference for indigenous procurement has been made a part of DPP through an amendment that provided for a preferred order of categorisation, with global sourcing being a choice of last resort. Under the second category, private and public sector firms can tie up with foreign vendors and produce the equipment required by the armed forces within the country.

It needs to be noted that for the purpose of indigenous sourcing, most of the dividing lines between public and private sector have been removed and for all practical purposes the policy regime is supposed to be the same for the two sectors as long as it is being sourced from a vendor within the country.

The DAC has also made it mandatory for the armed forces to explain to the Ministry when they do not prefer to buy from Indian sources or are excluding the higher category. Despite such a stated policy of indigenisation, the actual thrust is on foreign tie-ups.

But in recent years, there have been concerted attempts to forge close tot 5000 bonus en live webinars with the US and Israel in armaments acquisitions, and this is part of the present policy package. As a result, in recent years the US has become the most important source for import of armaments, and Israel too has emerged as a large supplier.

The US has been pushing armament deals with India worth over Rs 20, crore, including the sale of Apache attack choppers, Chinook heavylift helicopters and the Javelin anti-tank guided missiles. Against the background of the failure to stem the tide of imports and to develop indigenous technology, the Government, experts, and think tanks are increasingly turning tot 5000 bonus en live webinars their final solution for all problems — the private corporate sector!

A legion of foreign or domestic think tanks, business associations, and corporate consultants have come up with reports on the armament industry.

Though currently the presence of the tot 5000 bonus en live webinars sector in Indian military industry is minuscule, there is huge anticipation, and plans and capacities are being created by the big business houses and even foreign players. Recently, the government cleared 19 proposals from several large Indian corporate houses — including the Tatas, Mahindra, Reliance, Punj Loyd, and Bharat Forge — for military manufacturing.

Some skeletal details of the activities of the Indian big business houses in this sector have been provided in Appendix III. What emerges from the details in Appendix III, as well as other reports, is that the Indian firms operate as junior partners of tot 5000 bonus en live webinars foreign firms. It is doubtful that they bring significant know-how of their own tot 5000 bonus en live webinars the collaborations. One reason may be that those ambitions are bloated, beyond the actual strength of the Indian economy and industrial capability.

Another factor may be the indirect intervention by various vested and foreign interests to prevent indigenisation. Special interests predominate in the whole defence decision making and tot 5000 bonus en live webinars making process. Even the then Heavy Industries and Public Enterprises Minister Praful Patel, no foe of the corporate sector see, for instance, his role as the minister for civil aviation in compromising the interests of the public carrier 41was forced to raise questions on the move to bar PSUs from participating in the tender for supply of 56 transport aircraft as discussed in II.

Patel wrote to the PM and defence minister in Amid these special tot 5000 bonus en live webinars, it is very hard to discern tot 5000 bonus en live webinars real efficacy of any of the procurement decisions, even within the framework of the present system.

The Bofors deal under Rajiv Gandhi in the s is well-known, but a Wikileaks report suggests that he was involved in promoting a Swedish fighter during the Emergency in the mids itself, when his mother was at the helm. The HDW Submarine scandalthe Scorpene submarine scandalthe Barak missile scandalthe ordnance factory scandal following which certain firms from Israel, Germany, Russia, Singapore and India were blacklisted in are prominent tot 5000 bonus en live webinars.

So endemic are the ties between senior officers and arms agents that the erstwhile chief of naval staff, the late Admiral S. Nanda, who had been at the helm at the time of the HDW scandal, became an executive of Crown Corporation on his retirement from the Navy.

Crown is a notorious arms trading firm headed by his son Suresh Nanda, who was raided in connection with the Barak missile scandal.

Similar instances of corruption can easily be multiplied for all three services. In the s, when private agents were banned from military deals, for all practical purposes, defence PSUs filled in the role of the front for the agents or doubled up as agents themselves for the foreign suppliers.

As the Soviet-equipped Indian military began looking westwards in the early s to tot 5000 bonus en live webinars and replenish military equipment, the role of the DPSUs in brokering this switchover steadily increased. In a majority of contracts, the DPSUs do little other than deal primarily with local agents representing foreign manufacturers of military equipment. And, having negotiated purchases almost exclusively through these agents, the DPSUs then enter into a contract with the MoD to supply the equipment.

In short, the DPSUs end up playing the role of sub-brokers for the foreign vendors, sharing the commission in one form or the other with the local representative — all in the name of indigenisation and plugging corruption!

It is preparing a new policy that will allow foreign armament firms to legally hire agents, defence minister Manohar Parrikar said on the last day of Not only do special interests seem tot 5000 bonus en live webinars be influencing the armament procurement process, the real levers of control appear to be increasingly in the hands of the foreign vendors.

Or take the upgradation cost of 51 Mirage aircraft. It was officially said to cost Rs crore for each jet fighter. This does not take into account the two separate contracts signed by India with Dassault Aviation and Thales for Mirage weapon systems integration at a cost of Rs 6, crore. Thus, the total cost of upgradation becomes Rs 17, crore, or Rs crore for each aircraft, more than double of what was cited by the defence minister, Navlakha points out.

Take especially the import of the trainer aircraft, put on hold by the MoD in November last year. India was to buy PC-7 Mark II basic trainer aircraft from Pilatus to supplement the fleet of 75 trainers already contracted for, at a price of Swiss Francs million Rs 3, crore.

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