The pragmatic approach to politics and his focus on tackling problems rather than theorizing, the Prime Minister has set the ball rolling for reforms in Defence Production and Acquisitions. Need of the hour is to tackle seemingly intractable structural problems and the policy framework for galvanising indigenous aerospace and defence industry. There is need to overhaul the defence procurement system to increase efficiency and encourage domestic industrial base against the backdrop of long delays in acquisitions. As a self respecting nation, we should take pride in modernisation of the Indian armed forces through locally procured and maintained equipment. This will have attendant benefits of local asset creation, capability building, and core national interest of building a national capacity in this strategic sector.
The MoD has been taking some of credible measures, which were overdue due to lack of political will of the previous Govt. As a result some of the steps, taken with in one month in office on development of defence related infrastructure are welcome steps. The publication of a concise list of defence equipment, the cabinet note on proposal over FDI in defence, and discussions with stake holders, with each projecting from their perspective. The MoD internally holds that defence industry must be protected with a 49 per cent cap. Consensus between all the major industry bodies would make it almost certain that the DIPP proposal would be capped at 49 per cent. The difference of opinion is bound to be there, however, the need of the hour is proper cost-benefit analysis, keeping in mind the economy and national interest in the fore ground be conducted. During the Budget presentation the FDI has been permitted up to 49%, which is a welcome step.
The cover story is on policy reforms which addresses the issue of layers in Defence Acquisition, the main governance conundrum. Of course, this is somewhat counter to the dominant thinking , with so many committees, the so called collegian systems has given rise to passing the buck or defused accountability with the result the time line and cost has gone for a toss in each and every project. The project delays due to inaction must be questioned and accountability fixed. While reducing the layers is a challenge, it is not impossible with political will at the highest levels.
The governments need to introduce measures to overcome critical deficiencies in country high technology industrial capability through technology transfer, including facilitation formation of joint ventures, co-development and co-production. The private sector be treated as a stakeholder and provided a level playing field, beside a fair share in design and production of defence equipment.