Bhadra
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Graft endemic to MoD system
The Indian defence establishment, modelled somewhat on the Soviet system, is a closed universe which does not permit access to any healthy external market forces or influences
New Delhi: Two months ago, at the peak of the 'Tatra gate'/COAS versus MOD imbroglio, I had attempted an analytical understanding of corruption in defence procurements - 'why' does it occur and what is special about it, 'where' does it occur and 'how' does it occur.
Some of those arguments need reiteration and some further peculiarities of the Indian Defence establishment need to be highlighted because corruption is so deeply embedded in the very architecture of the establishment that only a radical redesign can offer a way out. On the question of 'why' I had referred to the 'monopsonistic' (a monopoly on the demand side) nature of the defence market, combined with, paradoxically a limited number of suppliers because of the whimsies and uncertainties of the market. A perverse kind of monopoly therefore prevails both on the demand as well as the supply side leading to an extremely unhealthy buyer seller relationship.
Structure
The Indian defence establishment, modelled somewhat on the Soviet system, is a closed universe which does not permit access to any healthy external market forces or influences. The Defence Empire consists of three distinct Kingdoms each having its own duchies, provinces, satrapies and fiefdoms. These are the Department of Defence, the Department of Defence Production and the Department of Defence Research. Each of these kingdoms has its own, exclusive, 'rent seeking' preserves which it jealously guards. The kingdoms of Defence Production and Defence Research, in particular, control gigantic establishments,-PSUs, Ordnance Factories and Defence Laboratories- all hugely lumpy, capital guzzling investments. The ostensible justification for these monstrously inefficient investments is to achieve some kind of strategic self reliance. Private industry has to be kept away except by way of reluctant ancillarisation and supply of some components - a process which opens up yet another area of rent seeking opportunities.
The Armed Forces work out their present and futuristic requirements, qualitatively (the GSQRs) and quantitatively and communicate these to the Defence Research establishment. The DRDO develops the products to match these requirements. The Armed Forces try out and approve the prototypes or the pilots and then Defence Production comes in to 'designate' one of their units to (a typical Indian usage) 'productionise' the product. The product is inducted into service and everyone lives happily thereafter, until the next product development cycle begins. Because everything is within the confines of the MOD it is supposedly insulated from corrupting influences from outside.
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(Continued)
The Indian defence establishment, modelled somewhat on the Soviet system, is a closed universe which does not permit access to any healthy external market forces or influences
New Delhi: Two months ago, at the peak of the 'Tatra gate'/COAS versus MOD imbroglio, I had attempted an analytical understanding of corruption in defence procurements - 'why' does it occur and what is special about it, 'where' does it occur and 'how' does it occur.
Some of those arguments need reiteration and some further peculiarities of the Indian Defence establishment need to be highlighted because corruption is so deeply embedded in the very architecture of the establishment that only a radical redesign can offer a way out. On the question of 'why' I had referred to the 'monopsonistic' (a monopoly on the demand side) nature of the defence market, combined with, paradoxically a limited number of suppliers because of the whimsies and uncertainties of the market. A perverse kind of monopoly therefore prevails both on the demand as well as the supply side leading to an extremely unhealthy buyer seller relationship.
Structure
The Indian defence establishment, modelled somewhat on the Soviet system, is a closed universe which does not permit access to any healthy external market forces or influences. The Defence Empire consists of three distinct Kingdoms each having its own duchies, provinces, satrapies and fiefdoms. These are the Department of Defence, the Department of Defence Production and the Department of Defence Research. Each of these kingdoms has its own, exclusive, 'rent seeking' preserves which it jealously guards. The kingdoms of Defence Production and Defence Research, in particular, control gigantic establishments,-PSUs, Ordnance Factories and Defence Laboratories- all hugely lumpy, capital guzzling investments. The ostensible justification for these monstrously inefficient investments is to achieve some kind of strategic self reliance. Private industry has to be kept away except by way of reluctant ancillarisation and supply of some components - a process which opens up yet another area of rent seeking opportunities.
The Armed Forces work out their present and futuristic requirements, qualitatively (the GSQRs) and quantitatively and communicate these to the Defence Research establishment. The DRDO develops the products to match these requirements. The Armed Forces try out and approve the prototypes or the pilots and then Defence Production comes in to 'designate' one of their units to (a typical Indian usage) 'productionise' the product. The product is inducted into service and everyone lives happily thereafter, until the next product development cycle begins. Because everything is within the confines of the MOD it is supposedly insulated from corrupting influences from outside.
.
(Continued)