SECURITY/ GOVERNANCE/ ECONOMY
Topic: General Studies 2 &3:
- Government policies and interventions for development in defence sectors
- Indian Economy and issues relating to planning, mobilization, of resources
Grasping the Defence Self-reliance
Context: COVID-19 has brought to focus the impact of supply chain disruptions caused to defence sectors and increased the necessity for self-reliance
Did You Know?
- For most of the past decade, India was the world’s largest arms importer, accounting for about 12% of global arms imports.
- Saudi Arabia jumped to first place in 2018 and 2019, but India still takes over 9% of global imports
Why defence self-reliance is necessary for India?
- India’s external dependence for its defence-preparedness creates vulnerabilities during military crises.
- Given two hostile neighbours and the threat of terrorism, defence self-reliance is of utmost need
- Given its great power ambitions, India cannot afford to rely on other powers for defensive purposes
- There is no dearth of skills as India does have technological capabilities but remains unutilized.
Steps taken by Union government to enhance defence preparedness
- Chief of Defence Staff (CDS) has been created
- Make in India initiative for promoting indigenous equipment in the armed forces
- A list of weapons systems for sourcing entirely from Indian manufacturers has been released by the government
- A separate Budget provision for domestic capital procurement has been made to encourage private defence manufacturers
- New Defence Procurement Procedures (DPP) 2020 are under formulation
- Liberalisation of foreign direct investment in defence manufacturing, raising the limit under the automatic route to 74%,
- A time-bound defence procurement process through
- Overhauling trial and testing procedures to speed up the procurement process
- Establishing a professional project management unit
- Corporatisation of the Ordnance Factory Board.
- OFBs structure, work culture and product range now need to be responsive to technology and quality demands of modern armed forces.
- Corporatisation, including public listing of some units, ensures a more efficient interface of the manufacturer with the designer and end user
- Self-reliance should not be taken to extremes: Thrust for indigenous R&D should coexist with the import of cutting-edge military technologies to safeguard defence vulnerabilities
- Domestic Procurement: When we import weapon systems, we should plan for the ammunitions and spares for them to be eventually manufactured in India
- A long-term integrated perspective plan of the requirements of the armed forces is needed to give industry a clear picture of future requirements.
- The definition of indigenisation itself needs to privilege technology over value or volume
- Export Promotion: Investment, Indian or foreign, will be viable only if the door to defence exports is opened, with a transparent policy.
- Promoting indigenous research and development through tax incentives
- To give private industry a level playing field for developing defence technologies, conflicts of interest, created by the role of DRDO as the government’s sole adviser, developer and evaluator of technologies have to be addressed.
Of the key components of any major reform — money, method and mindset — mindset is the most critical and the most needed to bring transformation in any sector.
Connecting the dots:
- Do you think CDS brings structural changes in army?
- Challenges in India’s defence trade