Keep Ministers out of all defence deals

India's defence acquisition procedure’s review by a Ministry of Defence (MoD) panel has asked ministers to stay out of all defence deals, stating that Generals should be allowed to take the call.

As reported by Economic Times, the panel, headed by former Home Secretary Dhirender Singh, also recommends Indian private sector leadership in high-value and key defence areas that counts manufacturing warships, aircraft and armored fighting vehicles.

With the proposal of keeping the ministers out of defence deals, the panel has said, "Whereas primacy is accorded to the political executive in all decision-making and especially on strategic national security issues, in matters of defence systems and equipment based on user preference and tactical and operational doctrines, the Armed Forces must have a decisive role."

The complete draft report by the panel, however, has been reviewed by the Economic Times.

At present, the armed services HQs have the financial authority to take a call on the purchase of up to Rs 100 crore. MoD, though, is supposed to take the proposal into consideration before it decides on the new procurement policy which, reportedly is expected to come-up in the next three months.

Agreements above the limit, anyway needs to get a clearance either from the MoD or from the cabinet committee on security (CCS). Not just this, but, the panel, again radically recommends instituting a specialised external procurement agency staffed by specialists with long tenures for such purchases.

The panel says, "We are strongly of the opinion that steps should be initiated without further ado, to set up a specialized structure outside the formal structure of the ministry of defence... a major objective would also be to operate it in a manner so as to serve the purpose of 'self reliance' in defence industry."

Not just this, but the report also made suggestions on incentivizing private sector participation in defence manufacturing including tax break for companies a common testing facility for projects under development, a cap on the liability of private entities for defence products and export permissions for those holding industrial licences.

The panel also suggests strategic partnerships with the private sector for complex weapons systems like missiles in the categories of anti-ship, air defence, air to air; air to surface, anti-submarine and land attack. It also says that Indian companies should be allowed to form partnerships with foreign defence manufacturers for projects that are strategically vital and high value - over Rs 10,000 crore.

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