Of Agents and Agency Commission in Defence
Of Agents and Agency Commission in Defence
- Amit Cowshish
- December 31, 2014
India spends a significant amount of resources on its national defence. Efficiency in utilisation of resources is not only an economic imperative but vital for defence preparedness. In view of this, the Defence Economics and Industry Centre was created in 2006 to promote research on various economic aspects of India’s defence. Since its inception, the Centre has undertaken a number of policy relevant studies besides constantly engaging vital stakeholders (Ministry of Defence, Armed Forces and Industry) on a range of issues. The major focus areas of the Centre are:
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Of Agents and Agency Commission in Defence
It is difficult to visualise how the Russian offer to make LUH in India could be actualised unless the government invokes ‘strategic considerations’ for making it in India or signs an inter-governmental agreement for that purpose.
It is necessary to evolve a long term strategy keeping in mind all the aircraft acquisition programmes, review the factors that contribute to determining the right numbers and begin the process of building a long term partnership with the private industry.
Replacement of the Avro is an approved requirement. Scrapping the on-going process could delay acquisition of the transport aircraft by at least a year or two as it would inevitably involve revisiting the qualitative requirements (QRs) before restarting the tendering process.
For the mantra to become an all-pervasive reality in defence acquisitions in India will be to multiply manifold the onset, frequency, range and depthof its industry engagements.
The effort to set right the operating environment has to start with creating a mechanism to review the existing devolution of power comprehensively based on clearly defined principles and not in an ad hoc manner.
This Brief analyses industry demands and reviews existing regulations in IT and defence procurement markets, culminating with suggestions on a possible way forward for reforms that can avoid adverse implications of industry demands, particularly in view of their potential conflict with important policies fostering indigenisation.
There is no single agency in MoD to deal with these issues holistically. Generally, matters related to administrative powers are processed separately for each service by the administrative wings concerned with little concern for commonality.
Widespread problems have made the operating environment ‘dysfunctional and inefficient’. Some of this is on account of inscrutable issues like ‘integration of the services with the MoD’ or ‘civil-military relations’ but, in large part, the immediate problem lies with MoD’s inability to resolve more mundane issues.
his Issue Brief examines certain provisions relating to intellectual property rights and transfer of technology in India’s defence procurement procedures, together with suggestions on streamlining the same for achieving enhanced procurement efficiencies in capital acquisitions.