Friday, February 28, 2014

Big spends, small gains

By Neeraj Mahajan

Six decades after Independence India is South Asia’s biggest defense spender and the fourth largest defense spender in the world behind U.S., China, Russia and U.K. Almost like a compulsive window-shopper without any specific purpose in mind, India would be spending approximately $ 80 billion on weapons and equipment like—fighter planes, artillery guns, surface-to-air missiles, tanks, bullet-proof vests, snow shoes, choppers and bullets from international suppliers. This is sought to be justified as a small price to pay for living in the world's most dangerous region with two nuclear-armed neighbors. 

Tatras- Nobody could change!
Traditionally the Indian Army receives bulk of the overall defense budget. In FY 2012-13 the army received almost half of all funding, followed by IAF 25%, Navy 19% and DRDO, 6% of the budget. The Indian Navy received 4% more funding while funds for army and air force decreased by 1% and 4%. The Naval budget grew 37-fold over the past 25 years from $181 million in 1987 to $6.8 billion in 2012.   But in the 2013-2014 defense budget, the Navy's share of total defense spending fell sharply with the Navy receiving the smallest chunk of the budget 18 % – as compared to 28 % for IAF and 49 % for Indian Army.   
Even though it was to achieve 70% self reliance by the 1990s, India continues to produces only about one-third of its defense equipment. It thus has to depend upon import because the Defense Research and Development Organization (DRDO) with a network of 51 laboratories and staff of over 30,000 including 6,800 scientists and engineers has failed in its mission to usher self-reliance in critical Defense technologies. It is today nowhere close to fulfilling its promise to usher-in 70 per cent self-reliance by 2005. Despite gulping four to six per cent of the Defense budget annually, none of the more than 1,100 items worth developed by it is a state-of-art weapon or equipment.

Almost all its projects- Prithvi, Trishul, Akash, Nag Missile programs, Pinaka multiple-barrel rocket launcher, MBT Arjun, Light Combat Aircraft, Electronic Warfare equipment and Sonar system for Navy are way behind schedule. The landed cost of MBT Arjun with more than 60 per cent imported components like engine and gun control system is going to be over Rs 25 crore a piece. In contrast a T-90 tank cost less than Rs 10 crore along with technology transfer. 

Similarly high cost of production, delays in delivery and suspect quality is the reason why more than 1,500 types of low to medium technology products produced by the 39 Ordnance factories and eight Defense Public Sector Undertakings (DPSUs) under the Department of Defense Production and Supplies hardly find any buyers even within the defense services or export markets.

An example of counterproductive overdependence on exports is the Rs 560 crore Project Tejas aimed to manufacture India’s first indigenously light combat aircraft. The test flights started in 2001 and after nearly three decades, the IAF has got operational clearance to initially induct only one squadron (20 aircraft). Despite promises to come up with a completely indigenous and higher variant by 2014, LCA’s engine, radar, navigation system and displays are imported. The matters came to a pass a few years ago when Israel reportedly refused to give AESA RADAR EL/M 2052 for LCA on the advice of US. Similarly no attempts were made to even change the drive system of Czech-BEML TATRA trucks from Left to Right hand drive in more than 20 years – the vehicles remained in service.