Defence Procurement Woes: Why The Ghost Of Bofors Must Be Put To Rest – Part 2

In Part 1 of this article, we saw how a lack of research and development (R&D) culture and overreliance on central public sector enterprises (CPSEs) which do not always deliver have hampered defence procurement in India.

In this part, we look at how politics, starting with the Bofors deal has cast a shadow on the defence acquisition and indigenisation decisions.

The Tejas fighter plane project was conceived in 1969, design studies completed by 1975, requirements finalised by 1985, the first flight flew in 2001 and introduced into service in 2015.

A total of 46 years in which electronics technology has changed so fast, so much that almost everything goes redundant by the time it is put in actual use.

There is, of course, cost escalation in any such delayed project. Similarly, the development of the main battle tank (MBT) Arjun started in 1974 and the first batch of tanks delivered in 2004 – a good 30 years later.

One of the reasons for these delays is that governments tend to be risk averse. They first approach the global players for new acquisitions.

Many times, owing to domestic criticism, CPSEs get involved. If neither side delivers – mainly because the decision makers cannot agree on backing one option – private domestic players get involved.

These players have little wiggle room to be competitive, so they tend to run their own politics rather than focus on the product quality.

A lot of this indecision comes from the infamous Bofors episode of 1980s. Bofors changed the entire rules of engagement and politics in India.

Given the allegations of corruption in the procurement of Bofors and subsequent politicisation of the issue for several years, the entire defence procurement system was paralysed with fear of retribution.

That fear, even 32 years later, continues to haunt the corridors of power even today.

The Bofors issue had another twist – the allegations were not just limited to political corruption, but also of the product itself being sub-standard.

Vishwanath Pratap Singh, the trusted Rajiv Gandhi minister who had a fallout with him, went to the extent of blacklisting the company behind Bofors on this ground.

However, during the Kargil War of 1999, India had no option but to use Bofors and these guns saved the day.

This was made possible by India allowing the parent firm to supply spares. The most chequered product in the Indian arsenal still had to be relied upon on a rainy day.

The V P Singh government also went after several senior and mid-level officers in the civilian bureaucracy and armed forces, while trying to implicate Rajiv Gandhi in the Bofors scandal.

This created another problem for Indian defence deals – the armed forces and the system itself became too cautious and conscious of the political fallouts.

The issue has not yet been resolved and continues to haunt the way India approaches its defence acquisitions.

The Congress lost the 1989 election over this and with the economic crisis of 1991, the defence sector was neglected. By 1996, the Bofors scam had become a Frankenstein that refused to go away and with the rapid changes in government, there was a non-stop witch hunt against everyone in the Rajiv Gandhi administration.

Media in the form of television evolved during this time and Congress got back by accusing George Fernandes of corruption in the procurement of coffins post the Kargil War, relying on the 24-hour television news cycle amplifying the issue.

With this allegation, a system that had already had a deleterious effect on itself as regards strategic decision making simply went into a coma.

Nobody wanted to take any risks whatsoever. Every defence deal was becoming a game of passing the ball and political risk. With unstable coalition governments after the Atal Bihari Vajpayee term, nobody wanted to address the issue.

The nation then had a defence minister for almost eight years in A K Anthony, who stretched the doctrine of indecision far too much. (Read this)

His response to any armed forces demand was to simply do nothing, so that he and his ministry are not tainted backing one decision over another.

The Manmohan Singh government also blacklisted a few global companies, thus limiting its options further.

A concatenation of circumstances resulted in India being paralysed over defence purchases for over 20 years and created a complete civilian chain of command in India that had spent a career from a junior level officer to senior-most leadership levels without taking decisions, afraid to take decisions and being risk averse.

To expect this civilian chain of command to now suddenly have the talent of decision making, taking risks is not easy.

That the security and defence preparedness of the country has been seriously affected, is to put it mildly. That the political discourse hasn’t changed much can be seen by the election campaign during the Lok Sabha elections in 2019 over matters of defence.

One of the areas where India has suffered due to the internal complexities of our procurement and defence establishment indecision is the balance of firepower against Pakistan. Ideally, India should be comparing against China, but we aren’t anywhere close. Even against Pakistan, our numbers do not look very rosy.

Let’s consider the macro parameters for both the countries.

Now let’s take a dip stick data of the armed forces infrastructure.

The actual figures may vary year-to-year. But the ratios remain largely the same. And while statistics can lie, they also tell a story. For a country that is between six to 10 times bigger/larger than Pakistan on the parameters that need to be defended, the defence infrastructure is in most cases hardly two times and slightly higher in some.

India’s defence preparedness in terms of infrastructure is not as high as it should or even could be. When you take into consideration that China is also hostile to India and a close ally of Pakistan, these figures can tell a vastly different story.

The defence preparedness is woefully short, and we cannot blame anyone but ourselves for it.

That the Indian governments post 1971 and especially post the 1988 Bofors scandal have allowed India to grow weak militarily is a fact. All the talk of a cold start, two-front war feel good on paper and the Indian armed forces can still prevail but only because of being able to sustain a longer period of engagement in a war.

Today, the fact is that the Indian armed forces infrastructure, from a conventional war point of view, is not a deterrence to Pakistan.

While the governments have taken some knee-jerk decisions in between the fact is also that it is only post 2014 that there has been a concerted effort to build military parity and conventional deterrence. This effort will still take years to yield results provided the momentum is maintained.

So, what are the next steps forward? The three most important steps are simple.

• A vision of what India should be in terms of defence preparedness by 2050.
• A clear defence procurement procedure that is time bound with short-term and long-term objectives clearly spelt out.
• A bipartisan, multi-party involvement in matters concerning defence and foreign policy so that either of these don’t get sacrificed at the altar of political expediency. This should be like the red line of no negotiation endorsed and announced to the country by all political parties jointly.

While the first and third points are more about planning and politics, the second deserves some attention.

Defence procurement needs urgent government focus. Some big picture ideas to streamline this procedure are as follows.

• Make the so-called agents – legally acceptable. Define who can be an agent, decide when and how a retired officer from the armed forces can be involved in a deal. Make these public and a study of how this works in USA/UK/France etc, can help frame the systems here better.
• Make decisions time-bound. Differentiate between commoditised purchases and technological purchases.
• The commoditised items will find multiple vendors and based on a minimum acceptable criterion can be thrown open to more bidders. Local manufacturing can be focused on here. Create right bidding thresholds to eliminate non-serious players who block the process by bidding low and then not delivering.
• When it comes to technological purchases, in the short run, convert every deal into a government-to-government (G2G) deal to reduce the risk of scandals and the losing bidders scuttling the deal.

The government should not try to divide a requirement between as many big bidders as possible just to expand the sourcing base. Instead, the government can encourage Indian industry to form consortiums and jointly develop and offer solutions that the armed forces may need in future.

India should eventually develop specialised firms in different areas with domain and item-level expertise.

When an Indian Space Research Organisation (ISRO) can do wonders by sending a satellite to Mars in their first attempt and is allowed the luxury of failure, there is no reason why others in the defence sector cannot do so.

India has the talent, capability and attitude to show results, but when the attitude and approach is about a “level-playing field” results are not possible.

Similarly, this same approach must be followed when developing a solution for the armed forces, selecting vendors and only then success is assured.

The socialistic attitudes that prevail need to go and cold, hard, logical judgements based on pure merit, quality, technology and price must become the norm.

It is 2020, and if such an approach were to be kickstarted today, it would still take 10 to 15 years for the results to show and hopefully by then, India can have conventional deterrent that is in line with its size and economic might.

Read Part 1 of this article here.