January 17, 2008armed forcesdefence procurementDRDOIndialiberalisationmilitaryPublic PolicySecurity

Defence industry woes: beyond the blame game

The real issue is competition (and the lack thereof)

This is an archived blog post from The Acorn.

It is unfortunate that those making arguments for positive change feel compelled to blame participants of the status quo for all that is wrong with it. The most famous example of this—and its unfortunate consequences—is the India-US nuclear deal. The prime minister’s office under Manmohan Singh sought to justify the need for this deal by casting doubts on the record and the capabilities of India’s nuclear scientific establishment. Not only did it create resentment in a constituency whose co-operation is vital for the success of the deal. It didn’t play too well with the public either, as people were more likely to trust India’s scientists on the topic than its politicians and spin doctors.

Now Bharat Varma, a respected analyst and editor of the Indian Defence Review, disses DRDO in an article in which he makes a very important point: the need for greater competition in the defence industry. Blaming DRDO for failing the Indian military’, though, was unnecessary and will draw undue attention to the less relevant part of his article. There is little doubt that DRDOs performance could have been better. But holding DRDO responsible for failing the armed forces is like holding Hindustan Motors responsible for India’s lacklustre car industry during the license permit raj. The real fault lies elsewhere. Given the right incentives, sleepy state-owned behemoths can reveal surprising agility. [Related Post: A player who is also a referee]

Capt Varma’s offers good suggestions as to how these incentives might be changed. One word: competition. It is fair to say that India has the industrial capacity to support the most exacting needs of the armed forces. What has really failed the Indian armed forces is the government’s failure to harness the vitality of the private sector and combine it with the achievements of DRDO and the wider public-sector scientific establishment. [Related Posts: Liberalise the defence industry; On government husbandry]

Public awareness of military and security issues is relatively shallow. The interest of reformers would be better served if the public debate generates more light than heat. Given the gravity of the issues involved, a slugfest that places the armed forces and DRDO in opposing camps is wholly unnecessary. You are now bound to see DRDOs supporters respond to Capt Varma’s article by pointing out how the armed forces prefer foreign hardware. And the debate can get passionate.

It is more important to target the Indian government, the political class, and the scandal-happy media for a concert of ineptitude, political point-scoring and sensationalism that is responsible for the armed forces not getting the most bang for the taxpayer’s buck.



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