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The Big Picture – One year of NDA Govt: Defence sector

The Big Picture – One year of NDA Govt: Defence sector

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Summary:

In the last one year of the NDA government, one of the areas which has received much attention is the Defence Ministry and the Armed Forces. The Indian Army was seen a couple of months after the new NDA government took over facing and retaliating against the heavy Pakistan shelling in Jammu and Kashmir. Later it was faced with the incursion from the Chinese army in Ladhak when the Chinese President was in India. The defence minister was also changed. Much has been discussed about the unusual Rafael deal with France. The issue of One Rank One Pension has also rankled the defence forces.

The government has cleared around 40 new defence acquisition proposals, worth over Rs 1 lakh crore, setting a scorching pace over the last one year. It has also revived several long-pending mega projects, which were virtually stuck in files during the UPA regime. The decision to increase the FDI in defence was also a major decision. There is much faster decision-making at the top, either in approving or scrapping modernisation proposals. But the bureaucratic bottle-necks remain and the procedures are yet to be streamlined. The Defence Ministry is also tightening screws on DRDO and its 50 labs, five defence PSUs, four shipyards and 39 ordnance factories to ensure they deliver on time in a cost-effective manner, apart from there being a determined push to encourage the private sector to enter defence production in a major way. Several long-held-up deals including those for Kamov utility helicopters, Avro aircraft replacement and artillery guns that have been identified as critical have been approved.

Allocation for defence for 2015-16 raised to Rs 2,46,727 crore against Rs 2,22,370 crore in previous financial year.The government has also downsized the new mountain strike corps stationed on the border with China, pruning the numbers from 90,000 to 35,000, citing reasons of financial prudence. The biggest strides in the last one year of Make In India initiative have been seen in the defence sector where 46 licences have been issued for producing homegrown defence vehicles, artillery and systems as well as several high-ticket international deals with countries like France and USA. The ministry is considering setting up special zones for the defence sector.

However, the new much-touted defence procurement policy (DPP) is yet to be finalised, there is still some uncertainty over the entire “Make in India” thrust, and the annual defence budget has not registered any concrete hike. The decision for outright purchase of 36 French Rafale fighters, which entailed the scrapping of the deadlocked $20 billion MMRCA (medium multi-role combat aircraft) project to acquire 126 such fighters took many by surprise.

The much-needed policy framework to provide direction for long-term military modernisation and build a domestic military-industrial complex still appear elusive. The implementation of the government’s election-time pitch of ‘One Rank, One Pension’ for military personnel too, while cleared in principle, has been delayed, and this has caused considerable anguish among ex-servicemen.