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READING LIST

FEBRUARY 2017 ISSUE

EDITOR'S NOTE
Letter from the Editor
Dear Readers
Two weeks before the biennial Aero India show, the government announced the Union Budget 2017. Three loud messages emanated from the annual defence allocation of Rupees 274,114 crore in 2017-18, an increase of 6 per cent over last year’s allocation.

The first is that the Modi government does not believe that war is a possibility with Pakistan or China. This thinking is betrayed in the capital outlay or the allocations for new acquisitions (from foreign and domestic companies) which are pathetically low (the equipment intensive air force and navy get Rupees 33,556 crore and Rupees 19,348 crore respectively), and, ironically have remain unspent both in 2015-16 and 2016-17. Despite the Modi government’s assertions about strengthening national defence, Rupees 7,400 crore from capital outlay were returned in 2015-16, and Rupees 14,000 crore in the previous year. What should be borne in mind is that the annual capital outlay is not meant to buy new goodies alone, but to pay for the contractual obligations or annual tranches for goodies bought earlier as well.

There can be only two reasons for unspent capital allocations: Inability of the defence ministry to decide what to buy; and fuzziness in the defence procurement policy. Both critical issues are the responsibility of the Union defence minister.

The second message is that the Modi government is not serious about military reforms, which are a must for a combat ready military. Given that India has two military lines to guard — the 776km Line of Control with Pakistan and 3,488km Line of Actual Control with China —, the army needs maximum reforms: Foremost being a correction in its revenue to capital ratio of 82:18. What this means is that while 82 per cent of its annual allocations is spent on pay and allowances of its bloated manpower, a mere 18 per cent is available for new equipment purchases. This is the ratio which a police force meant for law and order duties, and not a military meant for guarding territorial integrity should have.

The third message is that the Modi government — which has made ‘Make in India’ or indigenisation its calling card — is not serious about it. If ‘Make in India’ was not a mere slogan but a serious policy to make India technologically strong, there would have been separate allocation for research and development in the DRDO and Ordnance factories’ annual allocations. China has separate annual R&D allocation for its state-run defence industry.

Similarly, developed western nations where majority of defence industry is privatised, the companies spent as much as 20 per cent of its profits on in-house R&D. The Modi government seems to be content in getting the Know-How from abroad through the domestic industry route and branding it as India’s own Know-Why.

Unfortunately, this is what all previous governments have done. This is why India’s defence industry is what it is: We neither make world class systems and ordnance, nor are capable of integrating sophisticated systems. This situation remains unchanged.

Hopefully Aero India 2017 will show the way forward!

 
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