Where Has All The 'India Defence' Money Gone?

It was the summer of 1999. From May 26 to July 26, the road to war-torn Kargil from Leh was crisscrossed by the tyre treads of Tatra trucks carrying the Indian Army’s 410 155mm Bofors howitzers on their way to the mountainous war front where scores of Indian soldiers were fighting to recapture the heights of Batalik, Tololing and Tiger Hill where Pakistani irregulars had dug into bunkers. 

The key heights of the Kargil sector at 16,000 feet to 18,000 feet were under their control. The Indian Army’s answer was the controversial Bofors gun, with its 35-km range, which became its primary weapon to bombard enemy positions relentlessly. The Artillery had even struck upon a new strategy, by changing the angle of the guns to fire more effectively—a manoeuvre that has found its way into US military manuals. The Bofors howitzers were one of the primary factors in India winning the war. Firing three rounds in 12 seconds, they pounded the enemy ceaselessly for nearly two months, as the Indian infantry mounted attacks on the mountain slopes where the ice had melted in summer.
 

But a decade before the war, the artillery of politics over Bofors kickbacks from Swedish arms manufacturer AB Bofors had opened up on the Rajiv Gandhi government, causing it to fall in 1989. The shadows of Sweden came back to haunt the Congress party last week, with allegations surfacing over other deals that allegedly involved corruption by members of the Gandhi family. But the collateral damage was the guns that ironically won the war 10 years later. After the kickbacks controversy erupted, further purchase of Bofors guns and their much-needed spare parts were abandoned.

“If not for the Bofors guns, the infantrymen’s task of dislodging the enemy from their bunkers would have been an uphill task, pun intended,” explains an Indian Army artillery officer from the 8th Division that mans the Kargil sector now.

But the guns, inducted into the Indian Army in the late 1980s, were old. In the age of technological advancement in artillery, they had become almost obsolete.

“After Kargil, they again proved their mettle in 2001 during Operation Parakram, following the December 13 terror attacks on Indian Parliament,” the senior officer adds.

The contract signed in 1986 stipulated technology transfer to Indian ordnance factories. Strangely, it took another 14 years after Kargil for the establishment to wake up and realise that they had the capacity to manufacture the guns and parts. Work has just begun.

KICKBACKS AND FALLBACKS
India’s arms purchase scenario is full of bizarre irony. India is the world’s largest arms importer accounting for over 10 per cent of the world’s arms imports. It has spent `6 lakh crore on buying weaponry in the last 12 years. It needs modern fighter jets, aircraft carriers, submarines, light helicopters, attack helicopters, midair refuelers, radars, rifles, high altitude and mountain warfare equipment, artillery guns, battle tanks and more. 

The Rafale deal to purchase 126 combat planes has fallen under a shadow over differences between the Indian government and Dassault Aviation over HAL’s role in executing part of the contract. The aircraft carrier Gorshkov, bought from the Russians for Rs 12,000 crore, has crossed its delivery deadline. India’s indigenous aircraft carrier has been delayed by over four years. The Scorpene submarine delivery—that had come under a cloud of scandal and corruption—has been lagging behind by three years. The replacement tenders for INSAS rifles is yet to happen, after infantry complained about their poor quality. The much-lauded Arjun tanks have not got off the drawing board in spite of Rs 300 crore spent on R&D. 

As a result India is buying more T-90s from Russia. Of the many types of artillery required—155mm 53-calibre towed-guns numbering 1,180, 180 155mm 52-calibre wheeled self-propelled guns, 100 155mm 52-calibre tracked self-propelled guns and 145 ultra light howitzers—only the purchase of the last has been cleared. Though the nod came about a year ago, there is no traction on the part of the Ministry of Defence (MoD) to move ahead. After the Bofors fiasco, the Army has not bought even a single artillery gun since late 1980s.

In the last two Five-Year Plan periods beginning 2002-03 and ending in 2011-12, the Indian defence budget has grown two-and-a-half times—from Rs 65,000 crore in 2002-03 to Rs 1,64,415.49 crore in 2011-12. India had spent at least Rs 4 lakh crore on capital acquisitions during this period. Still, a huge gap exists between defence procurement strategy and reality. There are several critical areas of the Army, Navy and the Indian Air Force (IAF) that go begging when it comes to induction of new equipment.

The reasons for the delay are mainly bureaucratic red tape. While the global average for finalising a tender is three years, India takes a minimum of five years. At a meeting of the Cabinet Committee on Security (CCS) chaired by Prime Minister Manmohan Singh on January 8, 2010 and attended by Defence Minister A K Antony and then Finance Minister Pranab Mukherjee, two key defence acquisitions for the IAF were considered—the now graft-tainted VVIP helicopters from AgustaWestland, and Airbus A-330 MRTT tanker planes. While the CCS returned the file on the tanker purchase that was more important from the operational readiness point of view, citing the finance ministry’s objections to the cost of the aircraft, the VVIP choppers were cleared.

Even the most frivolous of corruption complaints could slow down the tendering process by at least six months when investigations take place.

“It took 15 long years for the Indian government to recover from the shock of the Bofors scandal. The adverse fallout of the scams are the loss of credibility of the top leadership of the services among the troops and the public; ban on a defaulting company that is likely to affect other major projects, thereby delaying modernisation and further slowdown in decision-making by bureaucrats, which is the worst factor,” says Major General Mrinal Suman, an expert on defence procurement policies and practices.

RED TAPE, SCANDALS  DELAY BUYING BOOM
In March 2012, the then Indian Army chief General V K Singh wrote to Prime Minister Singh on the deficiencies faced by his force in its war-fighting capabilities. That letter was leaked to the media and this created a huge political furore.

Of particular significance in General Singh’s letter was the huge gaps in the artillery wing of the Army, which is urgently in need of four types of guns to replace its ageing inventory, which is already in the last stage of obsolescence. New guns are required by the Army to replace its 1970s vintage guns of 105mm, 122mm and 130mm calibre. As a knee jerk response, a Defence Acquisition Council (DAC) met under Antony in May last year to fast-track the purchase of 145 ultra light howitzers from the US in a government-to-government deal worth Rs 3,000 crore. The ultra light howitzer procurement was pending for nearly a decade prior. 

These howitzers, which can be airlifted for quick insertion, are required by the Army’s mountain warfare units for deployment in high altitude terrains such as in Arunachal Pradesh and Ladakh. The Army has a plan worth Rs 25,000 crore to modernise its artillery, comprising 190 units. The delay was thanks to a bribery scam involving the Ordnance Factory Board. For the towed artillery guns procurement, the Army floated tenders twice—in 2002 and in 2007. In the first attempt, all three competitors—BAE

Systems, Soltam and Denel—failed to meet the requirements. In the second, bribery charges killed the tender in November 2009 after only one competitor was left in the race. It is a no-go in Indian defence tenders if only one vendor is left in the competition.

FLYING LOW THROUGH SCAM CLOUDS
The Army currently has about 150 Chetaks and Cheetahs, while the IAF has 75. Together, they need 384 Light Utility Helicopters (LUHs). Apart from the 197 LUHs to be procured from abroad, the Hindustan Aeronautics Limited (HAL) is to supply 187 machines under a July 2008 order. The Navy needs 75 LUHs for its aviation fleet and has issued a tender last year.

The 2007 tender for the 197 LUHs is on the verge of being scrapped after the role of serving Brigadier V S Saini in seeking a bribe from AgustaWestland came to the fore. (Former IAF chief S P Tyagi and relatives are embroiled in a scam on the purchase of VVIP helicopters from the same company.) Indian Army chief General Bikram Singh told a MoD panel on April 2 that a decision on the `15,000-crore LUHs tender should be taken only after a probe has been conducted into the allegations against Saini.  Of the 197, 133 machines were for the Indian Army’s Aviation Corps, while 64 were for the IAF. These helicopters provide air support and give a link to Indian troops posted in high altitude areas besides carrying out casualty evacuation roles in the icy heights of Siachen.

In a report presented to Parliament last month, the Public Accounts Committee (PAC) noted that the MoD had shown “no sense of urgency” to either finalise manufacturing of the LUHs by HAL or fast-track procurement from overseas.

Meanwhile, replacements for its Chetaks and Cheetahs have been jinxed since the first time the MoD issued a tender in 2003. It was cancelled in December 2007 after the helicopter from the chosen firm, Eurocopter, did not meet evaluation standards.

Combat Planes: India urgently requires 126 new medium multi-role combat aircraft (MMRCA) to replace its ageing and perilous 1960s vintage Soviet-origin MiG-21 fighter jets; but even after six years of tender, the ministry is not even close to signing the contract with French Dassault Aviation which won the bid in January 2012. The deal is worth nearly `1 lakh crore with delays adding costs to the initial `42,000-crore price. India bought combat jets last in 1997—Russian Sukhois. The 50-plane deal, struck when Samajwadi Party chief Mulayam Singh Yadav was the defence minister, has now grown into a 272-plane contract, with HAL being the manufacturing agency in India for 222 planes. India bought its first MiG-21 in 1966 and since then, it had picked up 872 from the MiG’s stable, including the MiG-23, MiG-25, MiG-27 and the MiG-29s. Of these, 485 have been lost in various mishaps.

 The IAF has been forced to go in for the MMRCA tender, described as the ‘mother of all deals’, due to delays in the Defence Research and Development Organisation (DRDO)’s Light Combat Aircraft (LCA) project, which has taken 30 years and Rs 11,000 crore to achieve Initial Operational Clearance—that too only likely in a year or two. The IAF had already placed an order for 40 LCAs with American GE404 engines, and another 100 LCAs with a more powerful GE414 engines in anticipation. If the LCA is delayed any further, the IAF may have to order 63 MMRCA planes more. These delays have led to the IAF’s combat squadron strength coming down to around 30, from its sanctioned strength of 39 squadrons.

Attack Helicopters: The IAF attack helicopters fleet of Mi-25/35 is meant to get a boost in the next two years with the selection of US aerospace major Boeing’s AH-64D Apache Longbow advanced gunship as the future platform. But the wait for the contract to be signed is only getting longer. Apache had won the tender, issued in 2009, beating the Russian Mi-28N Night Hunter. The initial contract may be signed this financial year, after July 2013. 

At present, the Indian government is negotiating with Boeing on the cost of the 22 Apaches, though the government has already indicated that the price for these helicopters will be upwards of Rs 7,000 crore. AH-64D Apache Longbow is radar-equipped and has long-range weapons accuracy and all-weather/night fighting capabilities. It can detect moving or stationary objects without being detected. It can classify and threat-prioritise 128 targets in less than a minute. 

It possesses integrated sensors, networking, and digital communications for situational awareness, management of the combat arena in real time, and digital transmission of images and target locations to joint operations battlefield commanders. It has seen action and successful missions in America’s War on Terror in Afghanistan. The twin-engine tandem seat Apache is operated by two pilots, and can execute an attack within 30 seconds of an alert. Apache has a strong shell made of composite fibres to protect the pilots and sensitive components from bullets.

The IAF needs these machines for combat air patrol for Army troops thrusting forward into enemy territory. They are a key component of the army’s three sword arm strike corps, though the Indian Army Aviation Corps plans to have at least one squadron of attack helicopters for all its 13 existing corps and a future mountain corps.

Heavy Lift Helicopters: Boeing’s Chinook CH-47F helicopter has been chosen by the IAF, which needs 15 helicopters in addition to its Russian Mi-26. The cost could be upwards of Rs 5,000 crore, according to MoD officials. The Chinook’s primary mission is to move troops, artillery, ammunition, fuel, water, barrier materials, supplies and equipment on the battlefield. Its secondary mission includes medical evacuation, disaster relief, search and rescue, aircraft recovery, fire fighting, parachute drops, heavy construction and civil development.

SO FAR SO BAD
The Indian Army has half-a-million rifles and carbines it doesn’t want, and plans to junk them all in the next five years. The dark lining is that these were made in India for its four lakh soldiers at a cost of Rs 25,000 crore, over two decades. So far so bad. Rs 50,000 crore more will have to be spent over the next decade to re-equip soldiers with the four kinds of weapons that are the key to the Army’s ‘Future Infantry Soldier as a System’ programme. The DRDO-developed the INSAS (Indian Small Arms System), as per specific requirements the Army, formulated in the late eighties. After the usual delays, the weapons were first seen with Army uniforms only on Republic Day 1998. 

They were first put to test in the Kargil War. A spate of complaints about malfunctioning and the quality of the rifle poured out of the Himalayan battlefields. The rifles jammed, their polymer magazines cracked in the cold weather and the gun would go full automatic only when set for a three-round burst. The soldiers wanted their 7.62s back. The glitches were fixed, but advances in firearms technology had rendered INSAS redundant in a rapidly modernising Army.  According to Lt. Gen. (Retd) P C Katoch, a Parachute Regiment officer, the INSAS was “not the best” of weapons.

India has now issued tenders for standard rifles and carbines and is in the process of issuing tenders for light machine guns and sniper rifles, thus completing the basic infantry quartet of small arms. Another senior serving officer said on condition of anonymity that the development of new weapons “is not possible in a jiffy”.

AT SEA
Aircraft Carriers: In an informal chat with reporters in 2012, the then Navy chief Admiral Nirmal Verma had proudly proclaimed that his force would soon be operating Carrier Battle Groups, a flotilla that was almost invincible in maritime warfare. His proclamation was based on India’s plans to have at least three fully operational aircraft carriers this year—INS Viraat, INS Vikramaditya and INS Vikrant.

The Navy has flogged INS Viraat, the 54-year-old former British Royal Navy’s ‘Hermes’, for over 25 years now since it was acquired in the late 1980s. But the ship has returned to the Cochin Shipyard for its refit programme and will be away from action for at least six months to a year. The planned acquisition of INS Vikramaditya—the erstwhile Russian Navy’s Admiral Gorshkov—and the Indigenous Aircraft Carrier (IAC), which is under construction at the Cochin Shipyard, are delayed further. Vikramaditya’s boilers had malfunctioned during its trial late last year. 

The Sevmash Shipyard in Russia has taken the 45,000-tonne warship back for repairs. The price has been hiked to Rs 12,000 crore from Rs 5,000 crore—the original cost in 2004.  IAC, or INS Vikrant, is delayed now by four years from its originally fixed delivery schedule of 2014 and is now expected only by 2018. The delay was caused by the problems relating to the supply of gearboxes and other key equipment.

Submarines: Since the time the Chinese Navy ventured into the Indian Ocean Region with two of its Destroyer ships on anti-piracy patrols in the Gulf of Aden in 2008, the need for the Indian Navy to shore up its already-precariously low fleet of 14 conventional and one nuclear-powered submarine has been strongly felt. A recent report submitted by the Navy to the MoD has pointed out that on 22 occasions in 2012, world navies spotted Chinese submarines in the Indian Ocean region. [The Peoples Liberation Army (Navy) has 60 conventional and 10 nuclear-powered submarines]. 

Yet, MoD mandarins are sitting over a Rs 50,000-crore government approval for a new six-vessel fleet under Project 75I cleared in 2012, which will lapse soon. India currently has 14 diesel-electric submarines—10 Russian-origin Kilo class vessels and four HDW German-origin vessels—apart from one nuclear-powered vessel, INS Chakra, borrowed from Russia on a 10-year lease in 2012. “Pakistan is nowhere near the Indian submarine fleet strength and has only eight conventional submarines. But the threat from Chinese subs is greater now than ever before and is likely to only increase in the years to come,” says an Indian Navy officer.

The Navy is worried that its submarine strength will fall by 30 per cent from its existing strength by 2015 and by 50 per cent by 2020, if the delay in buying new vessels continues. The existing project to build six Scorpene submarines for the Navy at the Mumbai-based Mazagon Docks Limited has hit snags due to procedural time overruns. The cost of the project approved in September 2005 at Rs 18,798 crore stood revised to Rs 23,562 crore in February 2010. Now, the delivery schedule has been revised to 2015.

Usually, a submarine performs best in the first 20 years of its life. The existing fleet of Kilo class and HDW class were inducted into the Navy in 1986. Yet, the Navy has no plans to cashier them. India has a 30-year plan period to induct 24 new submarines—approved by the CCS in 1999 when the NDA government was in power. But not one has been inducted.

With corruption and red tape haunting defence purchases, the security of India is being threatened at the taxpayers’ expense.

Key purchases in the last five years

• INS Jalashwa: India’s second largest ship weighing 17,000 tonne, after INS Viraat, is a landing pontoon dock for amphibious warfare to take Indian troops and battle tanks to enemy shores. The ship, which had served the US Navy as USS Trenton, was bought second-hand in June 2007 for Rs 230 crore.
• Phalcon AWACS: India got delivery of the three Israeli airborne warning and control systems, bought for Rs 5,500 crore, in May 2009. The systems, which are mounted on the Russian IL-76 platforms and can provide 360-degree cover, are force multipliers, capable of acting as eyes in the sky to monitor enemy movement from a safe distance. Three more AWACS are expected to join the IAF later.
• INS Chakra: The nuclear-powered submarine from Russia was leased for 10 years beginning 2012 at a cost of about Rs 5,000 crore. The 12,000-tonne vessel will be used by India to train its personnel ahead of inducting its indigenous nuclear-powered submarine INS Arihant.
• T-90 MBTs: The indigenous Arjun tanks being delayed, India placed orders for a total of 1,640 T-90 main battle tanks from Russia. The latest order of 1,000 tanks, to be licence-produced by the Heavy Vehicles Factory at Avadi, is worth over Rs 10,000 crore.
• Mi-17V5: The latest of the medium lift helicopters were ordered from Russia. The first lot of the 80 helicopters, bought for Rs 7,000 crore in 2008, was delivered to the IAF in 2012. These helicopters will aid in the logistics support to the Indian forces all along the frontiers. Orders for another 59 of these choppers are in the pipeline.
• Warships: The Indian Navy has got delivery of a number of warships, including the INS Shivalik, Satpura, Sahyadri, Teg and Tarkash. These apart, it has got delivery of tankers INS Deepak and Shakti, and scores of corvettes, patrol vessels and boats. These warships and vessels cost several thousands of crores of rupees.
• Hawks Trainers: The BAE Systems’ Hawks Advanced Jet Trainers (AJT), 66 of which were bought by India for Rs 6,600 crore, were delivered to the IAF in November 2007. The AJTs are put to use to train IAF’s rookie pilots in Stage-III flight training before they graduate to fly supersonic MiG-21. Two more tranches each of 57 and 20 Hawks are being ordered to meet the pilots’ training requirements.
• Akash missiles: The Indian Army has placed an order for two regiments of Akash missiles from Bharat Dynamics Limited, India’s missiles manufacturer, at a cost of Rs 14,180 crore in March 2011 and the deliveries are expected to begin later this year.