Archive for July, 2017

Defence ministry has delegated “substantial“ financial powers to the three defence services for carrying out perimeter security of sensitive military installations. This has been done to expedite the decision making process in the modernisation of the airbases and defence installations. The development comes a few days after the ministry delegated the Indian Army’s Vice Chief Sarath Chand of full financial powers to procure critical ammunition and spares to maintain an optimum level to be able to fight a short intense war. The army is facing critical deficiencies in its ammunition and spares.In relation to the fresh development, the ministry issued a statement on Thursday stating, “In an unprecedented move, the MoD has decided to delegate substantial financial powers to the armed forces for undertaking works for perimeter security of sensitive military installations. This has been done primarily to expedite the decision making process involved in the modernisation of the security apparatus of airbases and defence installations.“

The statement also said that the Vice-Chiefs of the three Services have been empowered to place orders, procure equipment and carry out civil works without further seeking approvals of the MoD.

The financial delegation rep resents a significant jump in the powers currently exercised by the services.

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The Central Bureau of Investigation has initiated a probe into the alleged supply of Chinese parts, which were being camouflaged as ‘Made in Germany’, for manufacturing the 155mm Dhanush guns, an indigenous version of Bofors gun.

Acting on a source information that fake and cheap Chinese parts were reaching the production line of indigenised Bofors guns, the agency has booked a Delhi-based firm Sidh Sales Syndicate and unknown officers of Guns Carriage Factory (GCF), Jabalpur for criminal conspiracy, cheating and forgery.
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Bofors artillery guns were used by army during the Kargil war in 1999 that gave Indian forces an upper hand over Pakistan military.
CBI, in an FIR lodged on Wednesday, alleged that the supplier connived with GCF officials to supply duplicate spare parts (bearings) used in the manufacture of Dhanush guns.

The GCF officials accepted Chinese manufactured ‘Wire Race Roller Bearings’ supplied by Sidh Sales Syndicate which were embossed as ‘CRB-Made in Germany’, said CBI.

The CBI said that the production and performance of the Dhanush gun is extremely crucial for India’s defence preparedness and “wire race roller bearing” is its vital component.

According to the FIR, a tender was floated for procurement of four such bearings according to the Rothe Erde drawing for 155 mm gun in which four firms had participated. The order was given to Sidh Sales Syndicate at the value of Rs 35.38 lakh in 2013.

The order was further increased to six bearings at the cost of Rs 53.07 lakh on August 27, 2014.

The company supplied two bearings each on three occasions between April 7, 2014 and August 12, 2014.

The company submitted ‘certificates in origin’ showing the bearings were procured from CRB Antriebstechnik, Germany. They were also embossed with the label, CRB-Made in Germany.

GCF tests showed that the bearings were unacceptable due to deviations in dimensions.

The company provided clarifications and assured that in case of non performance of the bearing due to manufacturing defects, they would replace the bearing free of cost and take corrective action for future supply.

“Consequently the bearings were accepted as a special case by unknown officials of GCF Jabalpur,” the CBI alleged.

Availability of 55% types of ammunition is also below minimum acceptable risk level, says CAG report
Highlighting the continuing shortage of ammunition in the army, Comptroller and Auditor General (CAG) has pointed out that there has been no significant improvement in the availability of War Wastage Reserve (WWR) ammunition. WWR, needed to fight a full-scale war, is still at a critical level, especially for the army’s tanks and artillery.WWR is the reserve of ammunition for meeting the requirements of 40 days of intense war or a full-scale war. In relation, the army plans its ammunition expenditure for these 40 days.

The developments came to light in a CAG report on the Army and ordnance factories, which was tabled in Parliament on Friday.

In addition, the CAG report also states that the availability of 55% types of ammunitions was below the Minimum Acceptable Risk Level (MARL).MARL is the requirement of ammunition for 20 days. It is considered as the “minimum inesc apable require ment“ to be maintained at all times to meet operational preparedness.

The CAG also said that 40% of ammunitions were at a critical level, having stock of less than 10 days. This means that there is also shortage of ammunition to fight even a short intense war, which usually lasts for 10 to 15 days.

“We observed no sig “We observed no significant improvement in the availability of ammunition (September 2016). Out of a total of 152 types of ammunition, the stock of 121 types of ammunition (80 per cent) was below the authorization level of 40 days (I) (WWR). Further, availability of 55 per cent types of ammunitions was below MARL, to be maintained for operational preparedness. Forty per cent types of ammunitions were in critical level having stock of less than 10 days,“ the report said.

“Availability of high calibre ammunitions relating to Armoured Figh ting Vehicles (Tanks) and Artillery are in more alarming state,“ it added.

Having such critical deficiencies means that it will be difficult for the army to, if the need arises, fight aga inst two countries at the same time.

The report highlighting such defici encies is a follow up audit of the ammu nition management in the army , which was conducted in January this year.

The audit covers the period from April 2013 to September 2016. Before this au dit, CAG had conducted a “Performan ce Audit“ on the same matter for the pe riod starting from 2008 to 2013.

According to the follow up audit, up to September 2016, only 20% met the authorisation level of the WWR. In comparison, up to March 2013, only 10% of the WWR was met.

In relation to this development, the CAG highlighted, “Though there ap pears slight improvement in availabi lity of WWR stock, scrutiny of catego ry wise details of ammunition revea led that the WWR level had increased mainly on account of increase in the stock of explosive and demolition items. But majority of high calibre ammunition relating to AFV and Artillery ammunition meant for sustaining superior fire power were under critical level.“

SHORTAGE OF FUZES

The report also states that there is excessive shortage of fuzes, which is the “brain of the artillery ammunition“.A fuze is fitted to the shell just before firing. “In the absence of fuze, 83 per cent of high calibre ammunition for tanks and artillery presently held with the army were not in a state to be used in operation,“ said the report.

TARDY PROGRESS IN PROCUREMENT

In July 2013, the Centre approved an Ammunition Road Map to build up the stock level up to 50%, meaning up to the MARL, by March 2015. The balance deficiency was to be met by March 2019.

However, the CAG report stated, “We noticed that no case of procurement (of ammunition) had culminated into contract despite sanction under the Ammunition Road Map by the Ministry in 2013.“

The project will have 5 regiments with 60 missiles and is worth Rs 17,000 cr
In a major upgrade to its defences, the Indian Army has signed a MoU with the Defence Research and Development Organisation (DRDO) to raise one regiment of the advanced Medium Range Surface to Air Missiles (MRSAM). The army plans to have a total of five regiments of this air defence system, which will be deployed opposite to China and Pakistan.The MRSAM marks a paradigm shift in the capabilities of the Indian Army. The system can shoot down enemy ballistic missiles, aircraft, helicop ters, drones, surveillance aircraft and Airborne Warning and Control System (AWACS) aircraft. Meant for the Army Air Defence, the MRSAM is an advanced, all weather, mobile, land-based air defence system.

It is capable of engaging multiple aerial targets at ranges of more than 50 km. Each MRSAM system comprises a command-and-control system, a tracking radar, missiles, and mobile launchers.

Each regiment consists of four launchers with three missiles each. So five regiments will have 60 missiles.

A MOU has been signed b e t we e n t h e a r my a n d the Defence Research and Development Organisation (DRDO) for one regiment.“The MOU marks the beginning of the development of the MRSAM in the configuration required by the army,“ said a defence ministry official, adding that the entire project is worth `17,000 cr.

Earlier this year, the Cabinet Committee on Security head ed by PM Narendra Modi approved a proposal for procuring the MRSAM system for the army. According to the proposal, the army will induct five regiments of the system.

The system will be jointly developed by Israel Aerospace Industries (IAI) and DRDO with the involvement of private sectors and DPSUs. “The system will have majority indigenous content, giving boost to the Make-in-India initiative.The participation of Indian companies in producing MRSAM will empower them in the field of hightech weapon technology.

Last July, the IAI and DRDO conducted three flight tests of the MRSAM at the integrated test range off the Odisha Coast. The missile successfully intercepted moving aerial targets in all three tests. The MRSAM is a land-based variant of the long-range surfaceto-air missile (LRSAM) or Barak-8 naval air defence system, which is designed to operate from naval vessels.

The armed forces have sought an allocation of Rs 26.84 lakh crore ($416 billion) over the next five years to ensure requisite military modernisation and maintenance to take on the collusive threat from Pakistan and China as well as to safeguard India’s expanding geostrategic interests.

Union defence ministry sources said the 13th consolidated defence five-year plan for 2017-2022, which has been pegged at Rs 26,83,924 crore after extensive consultations with all stakeholders, including the DRDO, was presented at the Unified Commanders’ Conference here on July 10-11.

“The armed forces pitched for an early approval to the 13th Plan because their annual acquisition plans are based on it,” said a source. These projections for higher defence outlays come at a time when Indian and Chinese troops are locked in a tense but “non-aggressive” face-off near the Sikkim-Bhutan-Tibet tri-junction, while the daily firing duels with Pakistan along the line of control continue to take a toll on both sides.

Union defence minister Arun Jaitley, who addressed the conference, assured the armed forces that capital expenditure for modernisation projects will be “a priority area” with resource availability increasing within the Indian economy. But it is also true that the actual annual defence budgets have shown a discernible trend of declining modernisation budgets, unspent funds and a skewed revenue to capital expenditure ratio, which have meant that the Army, Navy and IAF continue to grapple with critical operational gaps on several fronts. In the 2017-18 defence budget, for instance, the Rs 1,72,774 crore revenue outlay by far outstrips the capital one of Rs 86,488 crore for new weapon systems and modernisation.
Moreover, the Rs 2.74 lakh crore defence budget works out to just 1.56% of the projected GDP, the lowest such figure since the 1962 war with China. “The forces want the defence budget to progressively reach at least 2% of the GDP for their operational requirements,” said a source.

As per the 13th Defence Plan, Rs 12,88,654 crore has been projected for the capital outlay, while Rs 13,95,271 crore for revenue expenditure. With an eye firmly on China, there is also a separate section in the plan on the “capability development” of the strategically-located tri-Service Andaman and Nicobar Command, which was set up in October 2001 but has suffered from relative neglect, lack of infrastructure and turf-wars.

“The armed forces will concurrently work to improve their poor teeth-to-tail ratio as well as ensure proper inter-service prioritisation in procurements, thrust on indigenisation, and optimal utilisation of funds. They also want a concerted effort to prevent the yearly surrender of funds,” said another source.
The defence five-year plans are formulated in consonance with existing threat perceptions, the “Raksha Mantri’s operational directives” and the 15-year LTIPP (long-term integrated perspective plan). But they have not received much attention from successive governments, with the 10th (2002-07), 11th (2007-12) and 12th (2012-17) Plans failing to get approval from the finance ministry.

ARMY WON’T NEED TO GO TO DEFENCE ACQUISITION COUNCIL OR CCS This will ensure that the time taken in procuring such equipment will reduce tremendouslyReplenishing stocks necessary to maintain optimum level to fight short intense war

The Centre has given Army vice-chief Sarath Chand full financial powers to procure critical ammunition and spares to maintain an optimum level to fight a short intense war following “critical voids“ in capabilities of the Army . The major decision means procurement process of such ammunition and equipment that would take months would be completed much faster.The procurement of critical ammunition will be done for most of 46 types of ammunition the Army uses.The procurement of spares under the new scheme will be for 10 different types of equipment. The Army faces severe shortage in ammunition, mainly for artillery guns, tanks, air defence and certain infantry weapons, which will make it very difficult to fight a short intense war that lasts for 10 to 15 days.

“The Army’s vice-chief has been notified with full financial powers to procure critical ammunition and spares to maintain optimum levels,“ a top defence ministry official said. “By giving full financial powers to the Army vice-chief, the procurement of such equipment will be done faster. This is the revenue route for in-service equipment and there will be no need to head to the Defence Acquisition Council (headed by defence minister Arun Jaitley) or the Cabinet Committee on Security, for procuring such critical equipment. This will ensure that the time taken in procuring such equipment will reduce tremendously ,“ the official said.

The government has conducted faster procurement in the past when it realised that there were several voids in the capabilities of the Army, mainly in ammunition.

“To make up for the voids, emergency powers were given to the Army vice-chief for three months.It was extended for three more months. During this time, 19 contracts worth `12,000 crore were signed. The six months expired in March. Granting full financial powers to the vice-chief is meant to ensure an optimum level to fight a short intense war,“ the official added. In addition, the Army also intends to have enough ammunition to fight a 40-days intense war or a full-scale war.

Shotguns, rifles and bullets become cheaper; security agencies, banks among gainers
GST has come out all guns blazing. Under the new tax regime, shotguns, rifles and bullets are cheaper, giving a shot in the arm to weapons dealers across the country as well as their high-profile customers.“Big business houses, film industry and industrialists have been making queries. We are waiting for the ordnance factories to announce new prices,“ Hanif Bandukwala, Mumbai-based dealer and retailer who owns Bansons said.

Security agencies and banks are other customers who will gain, apart from big farmers who use weapons to ward off stray animals from their fields and goons from their homes. Politicians are also among the people who may keep personal weapons.

While dealers like Bandukwala are likely to gain, dealers have a problem selling guns in the biggest potential market, Uttar Pradesh. The Allahabad High Court banned fresh licences four years ago because it turned out that the 2.15 lakh guns with the state police were heavily outnumbered by private licences that were more than 11lakh. The court said the state was sitting on a volcano. UP, Bihar, Punjab, Haryana and Maharashtra are the biggest markets for the arms and ammunition industry which is around Rs 200-250 crore. It is growing 2% a year, according to the All India Arms Dealers Association that represents 4,000 dealers in the country .

“Rifles and guns will be cheap by 9%, while prices of revolver and pistol will go up,“ says Charan Pal Singh Ghei, chairman of the association.

Rifles, in which the barrel is grooved to make the bullet spin, and other shotguns account for 90% of the Indian market while smaller handguns make up the rest. Bandukwala said customers generally prefer Indian guns as new ones are generally available unlike foreign weapons that are mostly 10-20 years old.

Ghei said the popular 12-bore gun, which costs about Rs 20,000, will now sell for about Rs 18,000 while the 315-bore rifle will fall to about Rs 55,000 from the earlier price tag of up to Rs 60,000.

Under GST the government has kept pistol, revolver under 28% tax slab and guns and rifles under 18%. “Earlier, we were paying 12.5% VAT, 2% central state tax and 12.5% sales tax for guns, revolvers, pistols and rifles,“ informs Ghei.

Harjeet Bindra of Bindra Armoury in Bareilly district of Uttar Pradesh said that farmers in the hinterland of the state are the biggest buyers of arms. “The law and order situation in these areas is so bad that it is not safe to venture out after sundown. With the police station far off, one can’t rely on their assistance and hence it is necessary to keep guns and rifles,“ he said.

In UP, state taxes were the highest at 21% apart from the 12.5% VAT and 1% other taxes.Bindra added that the industry will benefit more if the government started issuing fresh licences.

Jodhpur-based New Light Art Works, which is one of the 100 private companies given licence by the government to manufacture guns, said that lower tax would encourage investment in the sector. “Orders have slowed down since June as the industry was waiting for the new tax slabs. In a month, I sell 125-200 guns to arms dealers. Till date in July, I have sold 25 and expect a pickup in demand,“ said 78-year-old Vijay Singh Bhati who sells guns under the `Óm VSB’ brand.