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Defence Plans Worth Rs 3.5 Lakh Cr Stuck
Bureaucratic bottlenecks, long-winded procedures, commercial and technical wranglings, coupled with the lack of requisite political push and followthrough, have ensured that no major “Make in India“ project in defence has actually kicked off in the last three years.Stock-taking of half-adozen mega projects, collectively worth over Rs 3.5 lakh crore, shows they remain stuck at different stages without the final contracts being inked. They range from future infantry combat vehicles (FICVs), light utility helicopters and Naval multi-role choppers to new-generation stealth submarines, mine counter-measure vessels (MCMVs) and fifth-generation fighter aircraft (FGFA).

The initial request for information (RFI) for another major `Make in India’ project, to manufacture 114 single-engine fighters in a second production line after indigenous Tejas light combat aircraft, of course, is also about to be issued. But though the Gripen-E (Sweden) and F-16 (US) jets are already in a dogfight to bag the estimated Rs 1 lakh crore contract, it’ll take years for indigenous production to take off.

Defence ministry (MoD) officials contend minister Nirmala Sitharaman is holding meetings of the defence acquisitions council every fortnight, as also reviewing projects on a case-to-case basis, in a bid to break the bureaucratic and other logjams.

“These are big complex projects for a country which cannot even manufacture specialised ammunition. They will take some time,“ said a senior official. Some steps have indeed been taken to boost the private sector’s role in defence production through “strategic partnership“ and other policies, besides according top priority to “indigenous design, development and manufacturing (IDDM)“ category in the Defence Procurement Procedure.

But India is still far away from reducing its strategically-vulnerable dependence on foreign military hardware and software. PM Modi’s talk of defence as the cornerstone of his “Make in India“ thrust is also yet to translate into concrete reality .

The Rs 60,000 crore FICV project (see graphic), first approved in October 2009, for instance, remains deadlocked over whether two or all the five Indian private firms in the fray, apart from the Ordnance Factories Board, be asked to design and build prototypes.

“Sitharaman is holding meetings to break the FICV logjam… It will be resolved soon,“ said an official. Mean while, the Army’s plan to induct 835 FICVs by 2017, with another 1,479 coming by 2022, has gone for a complete toss.

Similarly , the Rs 32,000 crore contract to manufacture 12 MCMVs at the Goa Shipyard in collaboration with South Korean shipyard Kangnam is yet to be inked despite a renewed push from Manohar Parrikar when he was defence minister in February 2015. “Negotiations are stuck because Kangnam wants deviations from the initial tender,“ said a source.

The FGFA project with Russia to co-develop and coproduce an Indian variant of its Sukhoi T-50 fighter, in turn, has taken a steep nose-dive after the IAF raised doubts about its stealth capabilities, engine performance, high cost and delivery time-frame.

Under a 2010 pact, India and Russia conducted preliminary design work worth $295 million, but the final R&D and production contract has been hanging fire since then. It will take around $25 billion to make 127 such single-seat jets in India. “It will have to be a top political decision whether to go in for the FGFA project or junk it,“ said a source.

Another project with Russia, the Rs 6,500 crore plan to manufacture 200 Kamov-226T light utility helicopters, is also in the doldrums despite an inter-governmental agreement in 2015. “The joint venture has been set up. But the request for proposal is yet to be issued to the JV to submit its techno-commercial offer,“ said the source.

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The government is contemplating a system to facilitate domestic defence manufacturing by speeding up the issue of industrial licences needed to start production. Under the proposed procedure, licences would be “deemed approved“ if the home ministry’s security clearance is not given within a “reasonable“ amount of time.In addition, in keeping with the `Make in India’ initiative, the defence ministry has asked the Defence Research & Development Organisation to create a “master list“ of its technologies that can be commercialised and given to private Indian industri es for manufacturing and export, besides looking at tax concessions for domestic producers. The ministry will ensure that bureaucratic hurdles are cleared in important acquisitions, including `Make in India’ projects.

Government sources said most of these issues were discussed during an interaction on Saturday between defence minister Nirmala Sitharaman and Confederation of Indian Industry (CII) representatives, where the matter of delays in the issue of licences was raised.

If the requisite clearance isn’t obtained for two months or more, then defence ministry officials will try and resolve the matter with home minister Rajnath Singh, the sources said.

The Modern Sub Machine Carbine (MSMC) is possibly the only weapon designed, developed and manufactured in India with a cult following among gamers across the world. The futuristic looking carbine-a compact weapon that fires smaller calibre rounds than an assault rifle-clearly caught the attention of the designers of Call of Duty. Since 2012, players of the franchise’s Black Ops II have had the DRDO-designed MSMC as one among five carbine options.

Weapons free. Photo: Maneesh Agnihotri

No one is quite sure how the virtual version of the weapon showed up in American-produced pop culture. The actual weapon’s history, however, is somewhat chequered. It was developed by DRDO’s Pune-based Armaments Research and Development Establishment after the Army announced a contest in 2006 to replace all of its obsolete World War II era 9 mm carbines. The 5.56 mm MSMC has a 30-round magazine and can fire upto 900 rounds per minute. An indigenously-made holographic sight with an inbuilt red-dot laser pointer allows for accurate aiming up to the weapon’s 200 metre effective range, making it ideal for use in confined urban spaces. The weapon is produced by state-owned ordnance factories and is close to meeting the army’s rigorous testing standards.

As the DRDO-OFB combine wait for the Army order, they have decided to offer the carbine to the police and paramilitary forces. Their optimism is not unfounded. Police forces are looking to modernise WWII era weapon inventories. Imports are not just expensive, but also subject to controls by host nations- German manufacturer Heckler and Koch has repeatedly cited human rights violations by Indian security forces as reason to deny exports.

The Chhattisgarh police became the first to order the weapon this year-640 of them-with similar orders expected from the Madhya Pradesh, Delhi and Meghalaya police. India’s paramilitary forces are another potential buyer. Its designers estimate the firearm has the potential to replace nearly 400,000 obsolete weapons, an order worth over Rs 45,000 crore (including ammunition).

“We have the production capacity to make around 35,000 such carbines each year,” says H.R. Dixit, general manager, Small Arms Factory (SAF), Kanpur. This Indian carbine’s transition from virtual to real could prove to be a potential game changer.

IN REVAMP MODE Move to also rebalance defence expenditure; this will be the first such exercise since Independence and will involve restructuring British era systems
The Centre has approved major reforms for the Indian Army aimed at enhancing combat capabilities and rebalancing defence expenditure. This will be the first such exercise since Independence and will involve restructuring British era systems. Posts of 57,000 officers, soldiers and civilians will be restructured and the Army would have state of art regimen and better logistic support units after the overhaul.There will be major changes to optimise signal establishments that handle the Army’s communication networks, restructuring repair echelons, redeploying ordnance echelons, better utilisation of transport echelons and closure of military farms and Army postal establishments in peace locations.

“These reforms will be completed by December 31, 2019. Restructuring by the Indian Army is aimed at enhancing combat capability in a manner that the officersJCOsORs will be used for improving operational preparedness and civilians will be redeployed in different wings of the Armed Forces for improving efficiency ,“ a defence ministry statement said. The savings can be utilised for overcoming deficiencies in combat arms, especially for officer cadre.For example, additional vacancies for commissioning officers in combat units like infantry , artillery, armour and mechanised infantry will be allotted to overcome these deficiencies. This way the `teeth to tail’ ratio (combat units to administrative + logistics ratio) would improve.

“The concept of warfare and logistics has changed over time, with modern mechanised forces and induction of new equipment in the Army. So this major reform was required,“ said a defence analyst. Due to this change in concept, there will be several redundant logistic units.

For instance, the signal regiments have undergone change due to change in electronic warfare. The development is similar for air support and logistics elements.

Moreover, the Army does not need elements such as military farms anymore, a British era concept that supplied fresh milk to Army units, due to the availability of packaged milk now. Similarly, the Army postal service is not required in peace stations as most official communications are sent by email over the Army Wireless Area Network. With the reforms, redundant ele ments will be remo ved and state of art regimen, such as for signals, can co me up. And techno logy will reduce the requirement of manpower.

 

The defence mini stry had constitu ted a committee un der Lt Gen DB She katkar to recom mend measures for enhancing combat capability and rebalancing defence expenditure of the armed forces. The aim was to increase teeth to tail ratio and have a judicious balance. The committee had submitted its report last December.Ninety-nine recommendations were sent to the armed forces for implementing the plan. Defence minister Arun Jaitley has approved 65 of the recommendations for implementation now.

In yet another major blow to the Army’s modernisation plans, the procurement plan for over 44,000 light machine guns (LMGs) for its humble foot soldiers in the infantry has been scrapped by the defence ministry.

This is the third such project, after the cases for new assault rifles and close-quarter battle carbines, to be junked over the last two years. This once again shows that often in race to acquire big weapon systems like tanks and howitzers, desperate need to equip soldiers with basic infantry weapons, bullet-proof jackets, webbing and ballistic helmets often fall by the wayside.

Sources said the defence ministry had “retracted” the tender or RFP (request for proposal) for the 7.62mm calibre LMGs on the ground that it had become a “single-vendor situation” with only the Israeli Weapon Industries (IWI) left in the fray after protracted field trials from December 2015 to February 2017.

The mega “Buy and Make” procurement plan involved an initial direct purchase of around 4,400 LMGs from a foreign armament company, followed by a tie-up with the Ordnance factory Board with transfer of technology for large-scale indigenous production. The entire project would have cost an estimated Rs 13,000 crore.

The dumping of the project comes after MoD late last year also scrapped tender issued in 2010 for 44,618 close-quarter battle carbines, in which too IWI had emerged as “resultant single-vendor” over Italian firm Beretta, amid allegations of irregularities and political intrigue.
Last September, the Army was also forced to re-launch its global hunt for around two lakh new-generation 7.62mm x 51mm assault rifles after similar bids over last decade were scrapped due to corruption scandals, unrealistic technical requirements and change in calibre of the desired guns, as was first reported by TOI.

The last RFP for the assault rifles was scrapped in May 2015 because of the Army’s overambitious experiment to induct rifles with interchangeable barrels, with a 5.56x45mm primary barrel for conventional warfare and a 7.62x39mm secondary one for counter-terrorism. “The three cases spell big trouble for the Infantry, which has been grappling with outdated basic weapons and lack of proper bullet-proof jackets for long. Given the long-winded defence procurement procedure, it will years for the new guns to be inducted,” said a source.

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.

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.