‘Seized Of The Need To Rationalise Revenue Expenditure’ Says Indian Defence Secretary Sanjay Mitra

Mr Sanjay Mitra is the Defence Secretary of India and belongs to the 1982 batch of the Indian Administrative Service. In the past, He has been the Chief Secretary of the Indian state of West Bengal and Secretary, Ministry of Road Transport & Highways in the Government of India. Delhi Defence Review’s Chandrashekhar Bhattacharyya caught up with Mr Mitra to discuss issues of current interest in the Indian defence sector.

Chandrashekhar Bhattacharyya (CB): Would you please apprise our readers about the status of the proposed Defence Procurement Organisation?

Sanjay Mitra(SM): Fail safe performance of Defence equipment under all conditions need no emphasis. The qualitative requirements are very stringent, and to achieve the same cutting edge technology of design and manufacture is required. The field trials of the equipment also take considerable time as the performance has to be tested under various climatic conditions. The world-wide vendor base for these equipment is also very limited. All these factors make the defence procurement a very complex and time consuming process. Notwithstanding this, the procurement process has to be made seamless and faster. Accordingly, the plan of restructuring the existing defence procurement setup is being formulated which apart from making the process faster and seamless will also align with the objective of self reliance in Defence Production and “Make in India” initiative of the Government. The ministry is presently undertaking a detailed analysis of the final recommendations towards building a new Defence procurement Organisation (DPO).

CB: India presently spends a lower percentage of its defence budget on R&D as compared to other major powers. Is this something that can be expected to change in the near future?

SM: In India, the expenditure on Defence R&D as percentage of Defence budget is low. There is a need to increase the same within the overall available financial resources. Private sector is also being encouraged to take up Defence R&D projects. Government has, accordingly, taken several initiatives to encourage the indigenous development of defence products. For example, IDDM (Indigenously Designed, Developed and Manufactured) category has been introduced as the first preferred mode of procurement. Make- II procedure in DPP, assuring procurement of the item on its successful development, has been introduced. Strategic Partnership (SP) model also envisages investment in R&D by foreign vendor (OEM) as one of the criteria for selection. In addition DRDO is also engaging the private industry and the academic institutions of repute in the country for Defence R&D.

CB: It has been pointed out that defence capital expenditure already accounts for a major share of the overall annual budgetary capital expense made by the Government of India. However, given India’s very real need to recapitalize its military inventory, would you say that it is perhaps time to rationalize the revenue expense on defence?

SM: The Ministry is seized of the need to rationalise and prioritise revenue expenditure on defence. The recommendations of the Shekatkar Committee regarding rebalancing of defence expenditure to improve the “Teeth to Tail Ratio” and enhance combat capability have been examined in the Ministry to frame key action points and road map for implementation. Some notable recommendations taken up for implementation include optimisation of various Establishments, closure of Military Farms etc.

CB: The Strategic Partnership (SP) policy was ostensibly introduced to create system integrators in the private sector. Recent reports however suggest that what was meant to be the first project to be executed under the SP policy, i.e the Navy’s Project 75I, has instead been allotted to a DPSU. Can you confirm the same, and what would you like to say to reassure private majors who have invested significantly in shipbuilding capacity, if this indeed be the case?

SM: The SP model was introduced in four sectors as mentioned in chapter VII of DPP 2016. The construction of conventional Submarine under the Project 75 (I) is one of the projects identified to be progressed under the SP model. The process of obtaining the response to RFI from the OEMs of the Submarine builders has been completed and the Issue of Expression of Interest, as the next stage of the process, is being formulated. As enshrined in the SP Model, the strategic partnership seeks to enhance indigenous defence manufacturing capabilities through the private sector over and above the existing production base in the country. Keeping this broad objective in view, MOD may consider the role of DPSUs/OFB at the appropriate stage(s) keeping in view the order book position, capacity and price competitiveness. MOD is fully committed to implement the SP Model in full spirit to align itself with “Make in India” initiative of the Government.

CB: A number of flagship Make-I projects such as TCS, BMS and FICV have seen little movement since they were first mulled. Will these major programmes continue to be pursued under Make-I or is there a rethink about them underway?

SM: These projects require long gestation period and high investment. After promulgation of recent provisions of Make-II, the requests have been received from the vendors to process these projects under Make-II. The same is being examined by the Ministry.

CB: Would you please apprise our readers about the progress made on the Government’s recent initiative to indigenize many different categories of munitions via the domestic private sector?

SM: To facilitate development of indigenous capacity and reduce import dependence with long term objective of building capacity within the industry as a robust alternative source of ammunition, the Government has approved manufacturing of selected ammunition for Indian Army by Indian industry. Accordingly, the RFPs for six types of ammunition have already been issued. Further necessary action on the bids received from the Indian industry is being processed.

Feature Image: In April 2018, Mr Mitra undertook a sortie on an Indian Air Force(IAF) Su 30MKI aircraft, a first for a Defence Secretary- the mission was flown in a dense network centric environment as part of the pan India level  IAF exercise, Operation Gagan Shakti.

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