Saturday, 31 May 2008

An Eye in the Sky: the DRDO’s plan for a MALE UAV

(Part III of a series on the DRDO and technology)

(Photo: a USAF Global Hawk UAV, back in the US after a tenure of deployment in Iraq)

by Ajai Shukla
Business Standard, 31st March 08

The so-called “war on terror” since 2001 has debunked much of the conventional wisdom about what military equipment a country needs to protect its citizens. But one piece of kit that has repeatedly proved its relevance is the Unmanned Aerial Vehicle, a remotely piloted aircraft which circles several thousand feet over a target area, continuously relaying high-definition pictures to a monitor, far away. The UAV has shown, in counter-insurgency and in anti-terrorist operations as much as in war, the critical importance of an “eye in the sky”.

Unsurprisingly then, India’s Defence R&D Organisation --- despite having radically curbed its traditional eagerness to develop even non-essential systems --- is going ahead with developing UAVs. The DRDO has sent out Expressions of Interest (EoIs) to several private sector companies, including the Tata Group, L&T and Godrej & Boyce, for manufacturing Medium Altitude Long Endurance (MALE) UAVs, which will be developed by the DRDO. These MALE UAVs will fly at tens of thousands of feet, watching a target for more than 24 hours continuously.

There are several firsts in the MALE UAV programme. It will be the first aeronautical programme in which the DRDO will partner a private company; since independence, public sector giant, Hindustan Aeronautics Limited (HAL), has monopolised this sector. This will also be the first time a production agency (the private company that wins the contract to manufacture the UAVs) will work with the DRDO right through the development process, so that the production run can begin without any hitches.

Significant as those landmarks are, the most interesting part of the MALE UAV programme is the decision-making process, which the DRDO has adopted, in consultation with the military. This was revealed to Business Standard in a series of interviews with top DRDO scientists.

In deciding on India’s fleet of unmanned aircraft, the DRDO and the military first zeroed in on UAVs that no country would sell. They agreed to develop micro-UAVs, which a soldier can carry on his back and quickly launch; and also complex Unmanned Combat Aerial Vehicles (UCAVs), which carry full weapon-loads to strike aerial and ground targets.

A greater dilemma was over mid-sized UAVs; countries like Israel are eager to sell India MALE UAVs. But eventually, says DRDO Chief Controller of Aeronautics and Materials Sciences, Dr Dipankar Banerjee, it was decided to develop, rather than buy, MALE UAVs for two main reasons. Firstly, the large number of UAVs the military requires creates a powerful commercial logic for a private company to manufacture them. And secondly, the DRDO feared that import of MALE UAVs might be blocked.

Dr Banerjee explains, “We have to see what is possible under the Missile Technology Control Regime (MTCR), which bans the transfer of technology and products with more than 300 kilometres range and 500 kilograms payload…. And so, there may be MTCR controls that prevent us from acquiring MALE UAVs. We also recognize that the technology that we develop for the MALE UAV will go into the UCAV.”

Notwithstanding the fears of technology sanctions, the DRDO knows that India’s growing leverage as a major arms buyer is making sensitive technologies easier to access. Technology planners in the DRDO say they are increasingly relying on components assembled from COTS (Commercially available Off-The-Shelf) equipment; the DRDO will develop only strategically vital components and carry out the technologically challenging task of “systems integration”, i.e. assembling a multitude of components into a functioning military system.

Before the end of June, Request for Proposals (RFPs) will be floated for the MALE UAVs. This project will be an important test for the DRDO’s new thinking, it will, equally be a test for the concept of bringing a private sector company into a major project as the DRDO’s industry partner.

Friday, 30 May 2008

The DRDO revolution: Technology first, weapons later



(Part II of a series on the DRDO's new approach to technology)




(Photos: The Akash launcher, at Defexpo 2008, with the DRDO's Chief Controller of R&D, Dr Prahlada. He was one of the scientists interviewed for this series of articles)


by Ajai Shukla
Business Standard, 30th May 08



It was a typical DRDO press conference, at the Aero India 2007 show in Bangalore in February 07. Brushing off questions about the Light Combat Aircraft (LCA) that had already been 24 years in the making, DRDO chief, Mr M Natarajan, announced a clearly unachievable 15-year target for building even more high-tech Medium Combat Aircraft (MCA), advanced trainer jets, and a fleet of Unmanned Combat Aerial Vehicles (UCAVs) that will fly without pilots to fight aerial battles by remote control. Most experts agreed this was science fiction… without the science.

But now the DRDO is bringing back the science. Steering away from ambitious targets, the DRDO has decided to announce new programmes only after completing the development of all the technologies that underpin them. After bruising criticism from the military, the media and parliamentary bodies, the DRDO is fundamentally changing the way it does business.

In the series of exclusive interviews granted to Business Standard by the DRDO’s top scientists, there is a clear realisation of the damage caused by failing to meet the huge expectations generated by Dr APJ Abdul Kalam (DRDO chief through most of the 1990s) for programmes like the Integrated Guided Missile Development Programme (IGMDP), the LCA programme and the Arjun tank.

The blame for this failure, say DRDO scientists, lay with being caught short of technology by the Missile Technology Control Regime (MTCR), which placed tight sanctions on India from 1988-89 onwards. The Akash system, to name just one, was delayed for years, because they unexpectedly found themselves having to engineer crucial radar components, which they had hoped would be available from the international market. 

“Today, there is a shift from purely building systems, to equally focusing on creating the technologies of the future”, explains Dr VK Saraswat, the DRDO’s Chief Controller of Missiles and Strategic Systems, who oversees key programmes like the Agni ballistic missile and the Anti-Ballistic Missile (ABM) system. “When there is a limited focus on a particular programme, generic technology development takes a back seat. But no organisation can sustain future growth unless you have built technologies for the future systems which are going to emerge.”

To boost technology development, the DRDO has organised its laboratories in “clusters”, each cluster developing a particular kind of equipment, e.g. missiles, aeronautics, or life sciences. Within each cluster, some laboratories develop weapons programmes, while at least one laboratory focuses exclusively on developing technology for the others in that cluster. In the missile complex in Hyderabad, for instance, the Defence R&D Laboratory (DRDL) and the Advanced Systems Laboratory (ASL) develop India’s entire range of missiles. Meanwhile, a third laboratory, Research Centre, Imarat (RCI) concentrates exclusively on developing crucial missile technologies, e.g. ring laser gyroscopes for the navigation systems of a ballistic missile that must accurately hit targets 3500 kilometers away.

The missiles that will run on these technologies will only be announced after the technologies are perfected. Dr Saraswat admits he is working on a 5000-kilometer range Agni-5 missile, with multiple warheads (MIRVs) that can manoeuvre and send out decoys to confuse enemy anti-missile defences. But the DRDO, he says, will only announce that programme, and ask the government for funding, when all the technologies are in place. 

The DRDO is accumulating technology not just from its laboratories, but from a range of establishments across the country: IITs, universities, and government and private science & technology establishments. Nobody will admit it on record, but even India’s space programme indirectly validates key DRDO technologies. The recent launch of 10 satellites from the PSLV-C9 rocket is not dissimilar to launching decoy warheads from a military ballistic missile. 

For now, the optimistic announcements of Aero India 2007 have been shelved, while DRDO laboratories work on the technologies that will power those complex systems. Dr Dipankar Banerjee, the Chief Controller (Aeronautics and Materials Sciences) says the MCA has not even reached the “concept studies” stage yet. And the technologies that will go into the UCAV are still being worked upon.

Dr Banerjee explains, “We need to mature the technologies (for the UCAV) first. Only then can we go to the Indian Air Force with a proposal. We don’t want the entire project to become hostage to one technology that gets held up.”

The DRDO has clearly decided that developing technologies is at least as important as developing weapons systems. Dr VK Aatre, the DRDO chief from 2000-04 had said, “weapons programmes and technologies have to maintain equal pace.” Only now is the DRDO heeding his advice.

Thursday, 29 May 2008

The DRDO revolution: A new engagement with the military


(Part 1 of a series on the DRDO's new approach to technology)

by Ajai Shukla
Business Standard: 29th May 08

The success, last December, of the Defence R&D Organisation’s Akash missile, which proved its ability to shoot down an enemy fighter 25 kilometers away, is a happy ending to a dismal tale. The Akash development programme, like others from the 1980s and 1990s, is a decades-long story of managerial and technological blunders, from which the DRDO is now drawing valuable lessons.

Under fire from the military and the media, and under scrutiny from a Review Panel set up by the Ministry of Defence (MoD), the DRDO has instituted fundamental changes in the way it will now approach equipment development. In a series of exclusive interviews with the Business Standard, top DRDO officials --- the Chief Controllers, who head its various divisions --- have outlined their new approach.

The most far-reaching change is an institutionalised forum --- called the Services Interaction Group --- in which the DRDO will work hand-in-hand with the military to identify the technologies, and weapons systems, which the DRDO laboratories must develop. The Services Interaction Group has already created its first “technology roadmap”, which lists out the equipment the DRDO will develop over the 11th and 12th Defence Plan period, i.e. from 2007-2017.

That roadmap took more than a year to finalise; the process began at the beginning of 2007. A DRDO sub-committee called the G-FAST (Group for Forecasting and Analysis of Systems and Technologies) began consulting with almost 50 DRDO laboratories across the country, to make a draft technology roadmap. Meanwhile, the three services, working together in the headquarters of the Integrated Defence Staff (IDS), produced their technology wish list. Then, through several sittings in the DRDO’s headquarters, the DRDO and the IDS agreed upon a final technology roadmap, which the DRDO would implement.

Such cooperation is routine in countries where defence is planned systematically. In India, however, the DRDO has long been at loggerheads with the services, which have complained about not being consulted about equipment that they must eventually use. This communication gap was glaringly evident in the Akash missile programme; after the DRDO developed all the Akash launchers, radars, and command systems, the army demanded higher mobility by fitting them into T-72 tanks.

The DRDO, having framed the Akash requirements unilaterally, was taken by surprise. Dr Prahlada, the DRDO’s Chief Controller (R&D) explains, “It’s not a joke to put the missile radar on a tank. It was a double challenge: having developed a cutting-edge radar, we then had to squeeze it into a tank, with all the problems of space, ruggedness, and high temperatures. You can’t even put an air conditioner, like in a wheeled vehicle… So instead of 12-15 years (to develop the Akash), we took 20 years; just to make sure the army gets it on a tank.”

But now, there’s a joint process. The DRDO and the IDS have divided 100 of the most important technologies they need into three different categories:

a. Category 1. Technologies that the DRDO will develop in-house. These are strategic technologies and systems, such as missiles, hypersonics, and unmanned fighter aircraft, which no country usually provides to another.

b. Category 2. Technologies that the DRDO will develop in partnership with academic institutions. The CSIR, IITs, and universities will assist the DRDO with fundamental research, to overcome the DRDO’s shortages of manpower and facilities.

c. Category 3. Technologies that the DRDO will develop with foreign partners, since they are beyond the capabilities of the country’s existing scientific base.

This is the first time that such rigour has been applied to the procedure for identifying projects and deadlines. In committing itself in this manner, the DRDO is displaying a new confidence. Senior DRDO scientists admit that they had traditionally avoided a joint roadmap because there was little certainty of being able to deliver on a project. If the project was successful, it would be brought to the user when it was nearly ready; if it failed, it could be quietly buried without any fuss.

Now, however, there will be transparency and accountability, and regular reviews of how long-gestation projects are progressing. Says Dr VK Saraswat, Chief Controller of Missiles and Strategic Systems, “This is a consultative process and it doesn’t stop. It is a continuous process. Every year we update it.”

Wednesday, 21 May 2008

MoD embarrassment in Berlin: new offsets policy not ready

By Ajai Shukla
Business Standard: 19th May 08


At 2 pm on 28th May, red-faced MoD officials in the Berlin Air Show could stumble yet again on an international stage. At a keenly anticipated two-hour seminar on “Opportunities in the defence sector in India”, a global audience of arms company executives will find a panel of top MoD officials explaining an old, soon-to-be-outdated set of procurement rules, rather than the much-awaited new rulebook. The new Defence Procurement Policy – 2008 (DPP-2008) was promised more than a year ago. 

The latest delay has surprised even the MoD, which had confidently predicted that DPP-2006 would be ready for Berlin (Business Standard, 8th May 08). This delay, it now emerges, has arisen because the MoD failed to consult with the army, navy and air force while drawing up the new rules. A meeting of the high-level Defence Procurement Board (DPB) last Friday, which was expected to clear the DPP-2008, found itself dealing instead with some 40 points raised by the three services.

The MoD, in a hurry to push through the draft DPP-2008, has conceded many of the points raised by the military. But the DPB meeting on Friday, chaired by Defence Secretary Vijay Singh, was forced to put off the consideration of several remaining issues to another DPB meeting on 23rd May. With Mr AK Antony departing for Berlin on 26th May, sources indicate that time has run out for obtaining final clearance from the top-level Defence Acquisition Council (DAC) and then promulgating DPP-2008 through the defence minister.

MoD sources admit a serious miscalculation in not consulting the three services while drafting the new regulations, since the points raised at the latest DPB meeting are entirely valid. Senior army officers point out that the new rules will directly affect the flow of weapons and equipment to the military; their inputs, they say, are relevant and necessary.

For example, the army pointed out that when a joint venture (JV) between an Indian and a foreign company wins a contract to build military equipment in India with technology supplied by the foreign partner, the Indian JV partner should automatically be entitled to manufacture the equipment. Currently, paragraph 19 of the draft DPP-2008 allows the MoD to “nominate” any Indian entity to manufacture the equipment.

Many of the JVs currently being tied up are rooted on the premise that the Indian partner will automatically have the right to manufacture the goods for which a contract is won. In this context, says a private Indian defence manufacturer who does not wish to be named, the MoD can hardly retain the right to “nominate” a company (traditionally a defence PSU) for manufacture.

If the MoD is, as seems likely, unable to promulgate DPP-2008, it will be only the latest failure to meet an important deadline. Already, at the Defexpo India 2008, in February in Delhi, arms vendors had been disappointed that the new rules were not yet ready. DPP-2008 will govern the purchase of an estimated Rs 300,000 crores worth of military equipment over the next five years.

Tuesday, 20 May 2008

Some killing questions about terrorism

by Ajai Shukla
Business Standard: 20th May 08

The 1st of June 2006 seemed like an unusually good day for the police: three heavily armed Pakistani fidayeen were shot dead while storming the RSS headquarters in Nagpur. Alert policemen had apparently forestalled a massacre within the complex; and a communal bloodbath across India.

In fact, that one-sided fire fight was the climax to a superb Indian intelligence operation. The terrorist cell that aimed to set RSS blood boiling had been deeply infiltrated; an intelligence mole risked his life to pass on every detail of the coming attack. He should, but will never, publicly receive a medal from the President. Others like him work anonymously to thwart most terror attacks that are planned against Indian targets.

But our intelligence agencies failed to predict the Jaipur blast conspiracy, which took 80 lives last Tuesday. The important question --- of why couldn’t the agencies zero in beforehand --- has been lost in the destructive finger pointing that characterises the Indian response to such tragedy. As always, the post-mortem has revolved around political charges and counter-charges: the revocation of POTA; being “soft on terror”; Bangladeshi migrants; and the need to press Pakistan for action against terror.

Not one politician or public figure has asked: why are just 20,000 people authorised to an Intelligence Bureau (IB) that is charged with the security of a billion people? Even if every IB employee was a field operative, of the kind that infiltrated the Nagpur cell, each would need to watch over 50,000 Indians. In fact, barely 2000 of the IB’s employees are field operatives; the remainder are tied up in administration --- manning headquarters, liaison with bureaucracy, budgeting and accounting, and the myriad tasks that the government creates for itself.

Nor has anyone questioned why the already understaffed IB has 4000 employees less than it is authorised. The numbing answer: an “optimisation scheme” to cut down on government employees froze recruitment for several years.

Not a single politician has asked why the recommendations of a Group of Ministers (GoM), constituted after the Kargil intelligence debacle, have not yet been implemented. Recommendations to expand the IB at the ground level; to set up Joint Task Forces for Intelligence (JTFIs) in each state; and to create a Multi Agency Centre (MAC) to bring together, compare and assess intelligence from different agencies; all these gather dust while terrorists gather strength.

Nor are there questions about why attempts to strengthen intelligence agencies immediately founder on the rocks of bureaucracy. Police and intelligence officers swear this is the dastardly handiwork of the “IAS lobby”. Whether or not there is a deliberate design here, requests for manpower and resources are successfully blocked by endless questions by junior IAS officers about why those are needed. The result: the IB has cobbled together an ad hoc Joint Task Force for Intelligence, without any permanently deputed members, and run with resources gathered from within the agency. 

If good intelligence is essential for thwarting terrorist attacks, a well-structured police network work picks up early warnings about an impending attack. But ground level policing is even more neglected than intelligence. Societies across the political spectrum --- from western-style democracies to authoritarian regimes --- divide their territory into police “beats”, assigning each a policeperson. That policeperson intimately monitors his beat, which could consist of a market; or a group of houses; or even a couple of villages. In India, though, there are too few policepersons for realistic monitoring.

The country’s 11,840 police stations are manned by some 10,12,000 policepersons; each cop must police some 1000 citizens. In geographical terms, there are 43 cops for every 100 square kilometres; each average beat is more than 2 kilometers long and 1 kilometer wide. But who has heard a politician ask the questions: can a single policeperson effectively cover so many people in such a large area? Why are we not boosting police manpower?

Compounding the shortage of manpower is a legislative framework that is 147 years old: the Police Act of 1861. There have been many failed attempts at creating a new structure: a National Police Commission submitted a report in 1981. In the years that followed, the National Human Rights Commission, the Law Commission, the Ribeiro Committee, the Padmanabhaiah Committee and the Malimath Committee also reported on this issue. A committee under Soli Sorabjee has prepared a model draft Police Act in 2006.

And here political point scoring begins again. Since law and order is a state subject, each state must legislate its own police act. Just ten states --- Assam, Bihar, Chhatisgarh, Gujarat, Haryana, Himachal, Karnataka, Kerala, Rajasthan, Tripura --- have actually drafted new police laws. Others, like Tamil Nadu, have complained that the centre is encroaching into the legislative domain of states.

In 2006, in one of its periodic huffs, the Supreme Court laid down directions for each state to implement before 1st January 2007. These include structures to insulate the police from political interference, and the separation of the investigative wing of the police from its law and order machinery. But the ground reality remains evident in the lack of success in solving --- and, therefore, failure to pick up useful information from --- the terror attacks in Malegaon (Sep 06), the Samjhauta Express (Feb 07), in Hyderabad’s Mecca Masjid (May 07) and Lumbini Park/Gokul Chat (Aug 07), Ajmer Sharif (Oct 07) and now in Jaipur.

Friday, 9 May 2008

DPP-2008: changes in offsets and FDI policy

(Part II of a two-part series on the new procurement policy)

by Ajai Shukla
Business Standard, 9th April 08

By 15th May, the Ministry of Defence (MoD) hopes to announce the long-awaited changes to its existing procurement and offsets regulations, spelt out in the Defence Procurement Policy of 2006 (DPP-2006). The new rulebook called the DPP-2008 will govern the purchase of military equipment worth an estimated Rs 300,000 crores (US $75 billion) over the next five years. It will cover the outright purchase of military equipment; transfer of technology to Indian companies for manufacturing equipment in India; development and manufacture of goods by Indian private and public companies; and a new, more liberal, defence offsets policy.

The most anticipated changes concern the defence offsets policy, which currently mandates that any defence contract worth more than Rs 300 crores (US $73 million) will place on the vendor a “direct offset liability” of 30%, making him liable for sourcing from India, defence goods or services worth at least 30% of the contract value. DPP-2008 is expected to increase offsets to 50%, at the MoD’s discretion.

The new policy will also allow “offset banking”, which means that a foreign vendor that generates defence business in India in a particular year, can “bank” that credit and claim it as an offset against a defence contract signed subsequently. However, DPP-2008 will lay down a time period, after which the banked offsets will lapse. 

Foreign vendors, particularly the six aerospace giants competing for the Rs 42,000 crore contract for 126 multi-role fighter aircraft, have been pressing to allow the transfer of technology (ToT) to India as a part of offsets. One reason for this demand was the hope that the messy process of tying up manufacturing partnerships with Indian defence producers could be avoided by discharging offsets liabilities through ToT. But DPP-2008 does not allow ToT to be counted as an offset.

A top MoD policymaker told Business Standard, “The aim of offsets is to build up the indigenous defence industry; allowing ToT as offsets does nothing for Indian companies. Besides, you don’t get the technology that we really want. It’s best to pay for technology up-front; you can choose the exact technology that you need.”

The other major change that the MoD is still contemplating concerns the enhancement of FDI limits in defence production. The current limit, laid down by Press Note No 4 of the Department of Industrial Policy and Promotion (DIPP), is 26% FDI in Indian companies engaged in defence production. The DPP-2008 could allow the FDI limit to be raised, on a case-by-case basis, to 49%.

Business Standard has already reported on an existing application for setting up a 49%-51% joint venture between multinational BAE Systems and Mahindra Defence Systems (MDS). While the MoD has verbally said that it is open to such JVs, depending upon the level of technology being brought into India through them, a specific mention of this in the DPP-2008 is expected to ease the grant of clearances.

The MoD is also grappling with the difficult issue of setting up a single-window body that will handle the growing offsets-related workload that will flow from DPP-2008, especially the accounting of “banked” offsets. Currently a small department called the Defence Offsets Facilitation Agency (DOFA) handles all offsets-related issues. If DOFA is to continue doing so, the MoD would need to provide it additional resources.

Thursday, 8 May 2008

DPP 2008: New rulebook for the billion dollar arms game


(Part 1 of a two-part series on India’s new defence procurement policy)


by Ajai Shukla
Business Standard: 8th May 08



The long wait for the global arms industry is drawing to a close. Top sources in the Ministry of Defence (MoD) have confirmed to Business Standard that a revamped policy for defence procurement and production is almost finalised. By 15th May, and in any case before the 25th, the Defence Procurement Policy, 2008 (DPP-2008) will be promulgated by Defence Minister AK Antony. 

Before that is done, a high-level meeting at the MoD, on Wednesday, would have obtained the defence minister’s decisions on a few key issues that are still unresolved. Thereafter, the Defence Acquisition Council (DAC), the MoD’s highest decision-making body, will approve the draft DPP-2008. After that, Mr Antony will formally announce DPP-2008. The new policy will simultaneously be published on the MoD website.

The new policy is long delayed, but there is now a clear deadline. In the last week of May, a high-level MoD delegation will fly to Germany for the Berlin Air Show (named ILA 2008), which is scheduled from 27th May to 1st June. The Berlin Air Show will be the international stage on which these top policymakers will field questions on DPP-2008. MoD sources say India’s new procurement policy must be promulgated at least a week before this event.

The two-hour seminar in Berlin, on the afternoon of 28th May 2008, on “Opportunities in the defence sector in India”, has already been sold out. Amongst those who will present the new policy in Berlin are Minister of State for Defence Production, Rao Inderjit Singh; Secretary (Defence Production), Pradeep Kumar; Director General Acquisitions, Shashi Kant Sharma and the Chairperson of India’s top offsets body, DOFA, Satyajeet Rajan.

The Chairman of Hindustan Aeronautics Ltd (HAL), Ashok Baweja, will also speak on the production capabilities of India’s aerospace industry. HAL is expected to be a key player in a large number of offsets contracts that will arise from the Indian contract to buy 126 medium fighter aircraft.

Confirming to Business Standard that the MoD was aiming to release DPP-2008 on 15th May, Minister of State for Defence Production, Rao Inderjit Singh ascribed the delay to the need to come out with a comprehensive document that clarified all the issues around offsets policy, foreign direct investment in the defence sector, and the promotion of indigenous defence production.

Rao Inderjit Singh said, “The idea is to come out with a comprehensive DPP-2008. It has been built into the policy (DPP-2006) that every two years we will make what changes are necessary. So we’ll have one in 2008; hopefully we’ll have the next one in 2010. It’s a continuous process of improvement.”

The delay in DPP-2008 is also partly due to a more vibrant decision-making process within the MoD, where divergent opinions have competed on important issues, such as whether offsets should be enhanced from 30% to 50%, whether FDI limits in defence production should be raised from 26% to 49%, and on the implementation of the new offsets policy. It is the final decisions on these questions that have delayed the announcement of DPP-2008.

(Next: Important new features in DPP-2008)

Tuesday, 6 May 2008

A CRPF manned by soldiers: should army soldiers be sidestepped to paramilitary forces after 7 years of soldiering?



(photo: CRPF troopers in Srinagar, J&K, after shooting an alleged militant. The towns and cities in J&K are now almost entirely held by the CRPF, along with the J&K police)



by Ajai Shukla
Business Standard: 6th May 08


Officers constitute less than 5% of the defence services, but the military’s objections to the 6th Pay Commission recommendations appear to centre largely on the concerns of officers, particularly issues of status parity with their IAS counterparts. But the crucial military manpower issues actually revolve around the 16 lakh soldiers, sailors and airmen who are grouped under the somewhat dehumanizing acronym of PBOR (persons below officer rank). 

This year, India has budgeted over Rs 22,000 crores for salaries for its fighting men and women. How much the pay commission will add to this figure is still unclear. In addition, defence pensions will absorb more than Rs 15,500 crores. But the big manpower question --- can India be defended by fewer people --- remains a hot potato. If thought has been given to personnel issues, it is on two other issues: reducing the pension bill, and keeping the fighting forces young.

The military’s plan for meeting both these objectives involves enrolling jawans for shorter service periods, after which they would transfer laterally to other government forces who would benefit from an inflow of trained and disciplined manpower. The 5th and the 6th Pay Commissions have recommended that India’s plethora of central police organisations (CPOs) --- which include the Central Reserve Police Force (CRPF), the Border Security Force (BSF), the Central Industrial Security Force (CISF), the Indo-Tibet Border Police (ITBP) and others --- take in large numbers of soldiers who have finished 7 years in uniform.

There are huge financial benefits to such a policy. The CPOs and civil defence organisations, numbering some 750,000 men and women, spend Rs 100 crores each year just on recruiting and training. Taking in the 50,000 trained jawans who retire from the military every year would save this amount. Even larger savings would accrue in the defence pensions bill. Instead of receiving pension from the age of 37 onwards (the average age of retirement after 17 years in the military), the jawans would serve for at least another 13 years in the CPOs. That would save the exchequer Rs 700 crores each year, growing cumulatively for 13 years. At the end of that period, pension savings would be Rs 9100 crores annually. The military would also save the money it spends on resettlement schemes and courses.

A leavening of trained and battle-hardened soldiers would enormously boost the capabilities of the CPOs, which appear depressingly weak in the face of a growing extremist threat from J&K, the naxals, and from the north-eastern militant groups. Pakistan, in contrast, has long used ex-servicemen as the backbone of its armed police forces (the Rangers, Scouts and the Frontier Constabulary), which function far more effectively than our CPOs.

But every sensible idea has at least one government agency opposing it. The 29th report of Parliament’s Standing Committee on Defence points out that the Ministry of Home Affairs (MoHA) is resolutely blocking the 5th Pay Commission’s sensible suggestion for the CPOs and the military to jointly recruit soldiers who would serve 7 years in the military and then sidestep into the CPOs. The MoHA’s arguments against this proposal make little sense and add credence to the belief that the CPOs are simply safeguarding the financial windfalls and networks of patronage that are associated with recruitment.

The Standing Committee has comprehensively rebutted each of the MoHA’s objections. The first of North Block’s objections is that soldiers who have already served 7 years in the military would make the CPOs older and greyer. Not so, says the Standing Committee; the average soldier is recruited at 19 years and would be only 26 years old when he finishes 7 years of military service. Since the current age cut-off for recruitment into CPOs happens to be 26 years, the soldiers would not just make the cut-off, but also come fully trained.

The MoHA then protested that soldiers are trained killers, used to employing excessive force, whereas the CPOs must function with a softer touch. The Standing Committee dismissed that objection too, pointing out that soldiers are extensively employed in counter-insurgency operations, and have conclusively demonstrated the restraint that such situations involve. Members of the Standing Committee snort that “CPO restraint” seems to occur most frequently when face-to-face with naxals and militants.

The next objection from the Home Ministry was that military personnel would bring 7 years of seniority with them, which would provide them an advantage over direct recruits into the CPOs. Admitting that ex-soldiers would bring their service seniority with them, the Standing Committee noted that direct inductees would be protected, both in salary as well as in promotion vacancies. In any case, the situation would be temporary; eventually all CPO recruits would come through the defence forces.

The CPOs are being shortsighted in getting the MoHA to stonewall a scheme that will greatly improve their manpower pool, and therefore their image and reputation. As the army withdraws from internal security duties in J&K, and as political will grows to confront growing naxal extremism, CPOs will be called upon to handle increasingly challenging duties. Manning central police forces with ex-military jawans would make them qualitatively superior and save money all around. It is an option that must not be turned down.

Friday, 2 May 2008

BLOGGERS' VIEW: Should the navy equip EVERY officer with a B.Tech degree?

There have been interesting --- and passionately argued --- responses to my story, carried first in Business Standard and then on NDTV, about the navy pulling out its officers from NDA one year early, so that they can be equipped with a B.Tech degree.

Let the discussion continue. I'm posting my view below. Comments are invited.

DON'T DISTURB THE CURRENT TRAINING PATTERN, because:

Fighting men have to be technically savvy; but they don't have to be engineers. They have to know how to stem the flow of blood from a wound; but they don't have to be doctors. They have to know how to get into the minds of the men they command; but they don't have to be psychologists. They have to know the strategic, operational and tactical contexts in which they function; but they don't have to have a degree in international relations.

Overqualifying a fighting soldier, sailor or airman in one dimension --- especially when it's made a mandatory requirement --- risks disturbing the fine mix of abilities that today's fighting man/woman must have.

Thursday, 1 May 2008

Raising the Foreign Direct Investment cap to 49% in Indian private companies in defence


by Ajai Shukla
Business Standard: 30th April 08

In 2001, the Ministry of Defence (MoD) opened the doors for the private sector in defence production, but the welcome has been less than whole-hearted. Press Note No 4 of 2001 laid down a 26% cap on Foreign Direct Investment (FDI) into defence manufacture, private companies must still pay for R&D in defence products and the MoD has not yet delivered on its promise to nominate selected private companies as Raksha Utpadan Ratnas (RuRs, or Champions of Industry), which would be treated on par with the defence public sector undertakings (DPSUs).

In the first five years after that initial opening, the 26% cap on FDI was never an issue; neither the private sector, nor foreign majors actually set up any facilities. But in the last two years, as India’s defence market has boomed and the Defence Procurement Policy of 2006 (DPP-2006) offered a clearer idea of the business landscape, foreign wariness has given way to a growing appetite for joint ventures (JVs) with Indian private companies for setting up development and manufacturing facilities. This change has also been accelerated by India’s defence offsets policy, which obliges every foreign company winning a defence contract to produce in India defence goods and services of the value of 30% of the contract.

If global defence majors now have the incentive to partner Indian companies, the Indian private sector has its own compulsions for establishing foreign tie-ups. The most important of them is the need to mitigate commercial risks in that most fraught of development environments: defence products. Military systems, which are usually at the cutting edge of technology, require enormous capital to develop and there are never any guarantees of actual orders. The Indian MoD had signalled its intention to subsidise private industry to the extent of 80% of the cost of developing high-tech systems; DPP-2006 contains an entire “make” section, with the procedure for funding an Indian company to “make” a defence product. But that procedure has never been used and private Indian defence manufacturers have little choice but to look abroad for partnership, funding and technology. 

But no foreign major is comfortable with transferring proprietary technology to a company in which it owns barely a quarter share. Advanced technologies cost billions of dollars to develop; a 26% share of the profits, say these companies, is small recompense. Their demand, in most cases, is a 49% share, since the foreign majors believe that the Government of India will insist on Indian control over the company.

Ultimately, the foreign majors’ bargaining power will be determined by the level of cutting edge military technology that they bring to the table. Moscow successfully demanded a 50% share in the Brahmos JV, since Russia contributed the technology for propulsion systems, which India was far from developing. Similarly Russian companies will get a 50% share in the JV that develops the Multi-Role Transport Aircraft (MRTA), purely because of the technologies that they supply.

If South Block is uncomfortable with crucial technologies being developed by JVs in which there are substantial foreign holdings, the MoD will have to create an environment in which Indian entities (DPSUs, private companies, and the Defence R&D Organisation or DRDO) can produce entirely Indian systems. That means urgently nominating the private sector RuRs, generously subsidising their R&D, and assuring a minimum order that can subsidise their input costs.