In 2019, I would expect a simpler version of DPP, which makes procurement possible in shorter time frame with minimum obstacles-Maj Gen SB Asthana

In the new year-2019-what are your expectations in terms of policies/initiatives that will propel the ‘make in India’?

Maj Gen S B Asthana-  India is the largest importer of defense equipment in the world, which is not something to feel good about, after 71 years of independence. Despite having the second largest Army and large Defense Forces, India needs to be self reliant in defense manufacturing, if it wants to be counted as a major power in South Asia. Lack of self- reliance has put our defense forces at disadvantage many times and has restricted our strategic choices in past. British deliberately kept their hardware industry in Europe, thus India became a late starter in this field.   To be able to deter our potential adversaries we cannot afford to be dependent on foreign suppliers beyond a point, to protect our strategic choices.  ‘Make in India’ is a right step  which needs to be steered/propelled in right direction, irrespective of political climate in the country.

Let me enumerate the impediments which have restricted self reliance in defense manufacturing:- 

• Heavy cost of Research and Development making it cost prohibitive and risky for private sector in India to invest in defense manufacturing, more so in absence of any assurance of any order in global competitive bidding. Except for dual use items or low technology equipment, involvement of private sector has not been very successful.
• Level playing field in comparison with PSU’s, which tend to enjoy protectionism in some form or the other. 
• Poor performance of DRDO in terms of cost and time overruns. 
• Difficulties faced by Indian companies (PSUs as well as private) in production of military hardware based on DRDO designs.
•  Our reliance on borrowed technology and extremely slow development of Defence industry has led our Armed Forces to have an inventory of borrowed, obsolete equipment with limited indigenous manufacture.
• Procurement process is so lengthy and complicated that in the period from October 2017 and October 2018, total capital buys worth Rs 86,030 crore were cleared by the DAC, but no contract was signed.

I am appreciative of the fact that in last two decades the Governments have understood that with large amount of deficiency and obsolete equipment, it is necessary to buy some equipment in ready to use condition and manufacture some in ‘Make in India’ model with technology transfers to get the state of the art technology. The issues were realized earlier, but the pace was very slow, as no medium gun was bought in last two decades. My expectations in terms of policies/initiatives to steer ‘Make in India’ in right direction are:-

• Policies have to promote joint ventures, collaboration with foreign companies having wider Research and Development base, with technological transfers. 
• The offset rules need to be elaborated further, to minimize controversies.  50 percent offset figures seem to be quite reasonable. 
• Politicization of purchase defense hardware in a democracy like India is an unavoidable evil, which to some extent has always been there. For hardware urgently required, the process should not be slowed down. Some controversy on big ticket deals is a common global phenomenon because the vendors who lose out in competitive bidding will like the deal to be scrapped so that they have a chance if the procurement process restarts. The debates in democracies like India should be positively inclined for accountability, transparency and other issues and not to delay/derail/abort procurement of essential security need of the defense forces. 
• The Government to Government deals should be preferred over lengthy procedures involving middlemen. 
• The DPP has become complicated in India as it kept adding clauses to prevent corruption, without actually punishing/convicting the corrupt. Now it is such a complicated bureaucratic process which actually reduces the chances of materialization of the item on ground.
• The ease of doing business has to improve further. The licensing has to be more liberal. We need to look at becoming an exporter of military hardware in next decade, instead of keeping it as a closed industry.  
• In 2019, I would expect a simpler version of DPP, which makes procurement/manufacturing possible in shorter time frame with minimum obstacles. The complication is that even after DAC approves certain procurements/manufactures( like the existing Government has announced procurement of over 3000 crores worth of equipment including Brahmos Cruise missiles, two stealth Frigates(over8000 crores), ARVs and many more schemes), but with long beaurocratic process, there is no guarantee that all the equipment cleared by DAC will eventually be with the users.   
• The policies/initiatives should be Private, Public and MSME friendly. 

What is your expectation in terms of the budget?

Maj Gen S B Asthana - To have adequate deterrence on Potential adversaries, considering the two front threat faced by India and the size of Indian Military, the ideal need will be three percent of GDP. However being realistic anything short of 2.5 percent will not be able meet the growing need of Indian military. At any point of time Military should ideally have 30 percent  state of the art equipment, 40 percent current equipment and 30 percent obsolete equipment.

 Indian Military is carrying almost 68 percent of obsolete equipment, which must worry the decision makers and the state has been no different since last two decades. In 2018, the country’s Defense Budget was meager $46.16 billion, out of which $30.61 billion was allocated for revenue expenditure, and only  $15.15 billion allocated for modernization, out of which over 60 percent were committed liabilities, hence not available for purchase of new equipment/weaponry. Incidentally that was the lowest budget since 1962, in percentage of GDP terms. Only $22 million ware earmarked for’ Make in India’ initiative. 

Thinking realistically, 2019 being the Lok Sabha election year, I do not expect a major shift in Politicians/bureaucrats/diplomats outlook towards Defence Budget, because appeasement of masses will overtake defense needs, in the competing priorities. It needs to be taken into account that if the adversary is not deterred then no one is safe. Offensive actions by adversary like Kargil, Sanjwan, Uri, Pathankot and most importantly, the attack on Parliament bear testimony to the fact that effective deterrence is necessary. Unfortunately few in diplomatic/bureaucratic community, seem to be convincing the decision makers like Pre-1962, that there will be no war hence military allocation can be on lower priority list, least realizing that the military capabilities take decades of consistent effort to build. If this perception is not set right, we may be heading for a situation when some of our strategic choices could be guided by the providers of military hardware.      

What are the major changes in the Indian Armed Forces (that you see in the New Year)?

Maj Gen S B Asthana- While as a positive thinker I wish Indian Armed Forces to take a big leap towards being even more effective and modernized force, but considering some hard realities, I expect only few positive reforms. Let me first highlight the realities:-

• 2019 being an election year may see some pleasing announcements for Indian Military in few months till Election Commission restrictions are imposed, but implementation will be slow. With over politicizing of Rafale deal, there will be some caution on decision makers for a big leap. Political parties may not mind dragging Armed Forces into politics wherever it suits them.
• With no major change in security threat, task/role, terrain/geography and resources, Indian Military because of its peculiar operational requirement including combating proxy war will still be a manpower intensive force, with cosmetic cuts related to duplicity of jobs. The threat and tasks have increased, and the geography is same, so combat soldiers required are same or even more.
• I am not too hopeful about the studies conducted with very good intentions of improving the teeth to tail ratio by cutting the tail and sharpening the teeth, to reduce revenue budget and save more money for capital budget to modernize and procure new equipment, to improve ‘Teeth to tail ratio’ or make Army lean and mean Force. None of the studies could touch the actual flab/tail which is defence civilian cadre, at Army Headquarters, MES (Doing job which can easily be outsourced), and other establishments which eat away a large part of revenue budget (As they serve for 60 years, unlike soldiers who have to leave much earlier). The media reports indicating 1, 50,000 jobs loss to my mind is impractical. Regarding changes in rank structure of the Army, it can be possible only if Air Force and Navy are also willing.  

Some of the positive changes in Indian Military, which I visualize progressing in 2019 and near future, could be:-

• Technological changes, especially in Information Warfare domain.
• Some progress in raising of Information Warfare Component with Cyber capability, improvement of proposed Space Warfare capability and raising of Special Operation Command. Incidentally achievements of ISRO, which despite being public sector to be proud of, may provide some more capabilities to Indian Military.. 
•  I do not see the miseries of IAF ending in 2019, unless HAL becomes super- efficient to deliver LCA or combat helicopters. To meet the basic need of 42 squadrons which will swell to 44 or 45 in next five years, the availability will decrease further with aging MIG-21 and Jagaur fleet from 32 to even lower numbers. The positiveness is that despite political debates the progress on Rafale is on and it may be delivered in time. 
• Navy had temporary orgasm with successful combat testing of Arihant, and may see few more inductions of combat and logistics vessels, but it has to be seen in light of Chinese intentions in Indian Ocean and more so in waters/islands very close to India, where global stakes are not as high as Indian stakes. In areas of global interest other navies will also add to the combat power, which goes to the credit  of good diplomacy.
• Although some equipment has been approved for the Army by DAC earlier this month, but I do not see it materializing in 2019 as per the processes involved in DPP. Some military equipment  from committed liability list, indigenous productions and some items purchased under Army Commander’s special powers will add to some combat capability.