Indian MOD Clears Multi Billion Dollars Defence Contracts


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Jun 29, 2009
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The Indian Ministry of Defence has been scurrying to maximise the defence allocation for the fiscal year 2009-10 by making major purchases before the 31st March. While many defence contracts and negotiations are signed in the fiscal year, the end of the financial year usually witnesses some expensive purchases to avoid under utilisation of the defence allocation.

Many of the defence deals signed during the fiscal year 2009-10, especially during the recent months, will be fast-tracked and will come to its fruition before the fiscal year ends. Besides, a host of contracts will be signed and negotiations will be finalised within the next couple of days so that the first payment can be released from the 2009-10 defence allocation.

Among the major defence contracts and purchases that are being mobilised in the current fiscal are the upgrade of Mirage 2000 fighters at $2.2 billion and the purchase of Akash missiles for the Indian Air Force (IAF) at about $1 billion. Earlier last week, the Indian Army entered one of the biggest defence contracts for the acquisition of two BrahMos cruise missile regiments at over $1.8 billion.

Earlier this year, the Indian defence ministry quietly inked a $745 million deal to acquire 12 three-engine AW-101 helicopters from AgustaWestland, a unit of Italian major Finmeccanica, for IAF’s elite Communication Squadron which escorts the President, Prime Minister and other VVIPs.

During the recent visit by the Russian Prime Minister Vladimir Putin, two major defence deals were finalised including the hiked price of the refit of the aircraft carrier Admiral Gorshkov and the purchase of MIG-29K fighters for the Indian Navy, adding to a total of almost $4 billion. Other major contracts include the over $100-million repeat order for 400 Barak missiles for the Indian Navy and the IAFs $60-million order for Crystal Maze air-to-surface missiles.

The Indian Defence Ministry has underutilised its defence allocation for many years due to delays in concluding contracts. According to the revised budget estimates in this year’s budget presented last month, the Indian Defence Ministry was not able to spend $1.08 million meant for purchases by the end of January. Earlier this year, the Defence Expenditure Review Committee (DERC) report pointed the shortcomings in the acquisition process, which led to the inability of the three services to utilise $8.53 billion between 2000-01 and 2007-08.
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Feb 19, 2009
and there goes all the defence budgetary allocations down the drain in the name of corruption, and this is so irritating about our polity and the way bureaucracy in our country functions and sadly this remains a story all across the board with almost all the ministries, MPs, MLAs who either under utilize or most of the utilization happens in the fag end of fiscal year because in the past they have not got the cuts they were seeking, no wonder development and basic necessities in our country remain largely elusive to the majority of the society, and it is sad such things are allowed to happen when a person like AK Antony, raksha mantari, has an image of being honest to the last paisa (not sure how true), but then he was never the one who could push around his bureaucrats to do the job, and has been caught complaining that they are the biggest hurdle, how lame an excuse for his inefficiencies, but then being a yes man of a certain madam helps.

hope to see corrective measures be taken in the coming few years, or the system will just keep rotting!

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