Although the new measures announced to fast-track the defence sector are significant, they do not add up to a comprehensive and overarching reforms package.
The government’s decision to allow the private sector to undertake the development of complex defence equipment is a step in the right direction. It will help forge a larger innovation system to meet the diverse requirements of national security. However, caution may be required to avoid duplication of efforts and prevent indirect import.
The government seems to have little fiscal space for accommodating the demand of the armed forces for additional funds, given its quantum on the one hand and the state of its revenues on the other which are already quite stressed.
The agile acquisition or C2D2 model currently under adoption by the US for its F-35 aircraft is likely to become a necessity for acquisitions in future, as disruptive defence technologies will continue to affect military systems across the world.
It would be nice to see the defence ministry setting up a task force and submitting actionable recommendations which could be considered by the finance minister while deciding the defence outlay next year.
There is a need to make it clear in the text of Paragraph 72 of DPP 2016 that no vendor other than the Development-cum-Production partner or the nominated Production Agency will be permitted to enter the tendering process at the post prototype development stage.
That the AK-203 would be produced in India with 100 per cent indigenous content in less than three years makes it a win-win deal for the Army and the Make in India initiative, with Ordnance Factory Korwa emerging as the biggest winner.
The eight per cent hike in the interim defence budget 2019-20 is bound to further intensify the resource problem of the MoD, which is already battling a massive shortage of funds.
Defence capability building and capability sustenance have been adversely affected over the past decade because of inadequate allocations and the status quo approach of the Defence Services.
