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Reliance think-tank advises Modi govt: Involve private sector in defence manufacturing in big way

By Our Representative
Close on heels of the Government of India’s controversial decision to raise the foreign direct investment (FDI) limit in defence sector to 49 per cent, the powerful Reliance Industries Ltd’s New Delhi-based think-tank has asked the Modi establishment to make “a critical doctrinal shift in the country’s approach to national security”: transform the Indian defence sector by “encouraging the large-scale entry of the private sector into the defence research and development and industrial sectors.” And for this, it indicates, there is an urgent need to increase the country’s defence budget, which is allegedly very low.
The top think-tank, Observer Research Foundation (ORF), in its latest report titled “Rebalance and Reform”, authored by well-known policy experts C Raja Mohan, Manoj Joshi, Ashok Malik and Samir Saran, reminds the Modi government that the Department of Industrial Policy and Promotion (DIPP) in consultation with the Ministry of Defence has already taken the first step in identifying “areas for private sector involvement in production of defence hardware such as radars, armoured combat vehicles, warships, electronic warfare and aircraft.”
Pointing out that right now the “private sector involvement has been restricted to small-value defence contracts and supply of low-tech equipment”, the think-tank suggests that the Modi government should not restrict to 49 per cent FDI in defence. “The government should encourage greater FDI in the defence sector and ensure that India’s defence production becomes commercially viable, with the country becoming a net exporter and entering global supply chains for defence weapons and systems”, it insists.
The think-tank further says, “The government should establish a Defence Research, Technology and Industry Commission comprising of top defence bureaucrats and private sector leaders to encourage public-private partnership across the spectrum in the area of defence.” It adds, “In particular, public-private partnerships for research on transformative and emergent technologies should be encouraged.”
An illustration from the report 
And for this, it favours India is in a unique position to cement its place as a global player in the defence sector. Pointing out that “India must have a strong and decisive leadership at the helm of the Ministry of Defence”, the think-tank wants the government to revive what Jawaharlal Nehru had abolished long time back in order to keep supremacy of democratic establishment over a centralized defence establishment.
It says, “The government should appoint a Chief of Defence Staff (CDS) to assume charge of the Integrated Defence Staff headquarters. The CDS would head the tri-service institutions such as the Strategic Forces Command and the Andaman & Nicobar Command. He would be in charge of coordination and prioritisation involved in writing the armed forces Long Term Integrated Perspective Plan (LTIPP) and the five year plans”.
It further says, “He would lead the shift of the country’s armed forces to the concept of theatre commands and take charge of any out-of-area contingencies. The CDS would be the permanent Chairman of the Chiefs of Staff Committee and hence be the principal military adviser to the government”.
All this is important, the think-tank believes, because India is “today is confronted by a host of new security challenges”. While “some of these challenges lie in new domains, such as space and cyberspace”, others follow as a result of “new dynamics … within the domain of traditional security challenges, such as terror outfits operating in the country or the spreading Left-Wing Extremism (LWE).”
Declaring that “the Indian security apparatus is not adequately equipped to deal with these challenges effectively”, the report states, “The process of modernising and equipping of the armed forces and police has not progressed at the desired level.” It believes, “Ineffective management has led to the Air Force numbers declining significantly, the Navy suffering from a shortage of ships and submarines and obsolete weaponry for the Army. “ It would also strengthen India’s “position among the global powers”.
If all this happens, the think-tank indicates, “the government would be able to “fast track the delayed ongoing projects and acquisition plans of the three Services, such as the LCA Tejas, the Scorpene submarine, the IAC II aircraft carrier, the nuclear powered attack submarines; the modernisation requirements of the army such as battlefield management systems, night-fighting capabilities, enhanced firepower; and the deeper integration of technology in modern warfare.”
Only then would it be possible to fight LWE, which “continues to be the country’s biggest internal security challenge”, the think-tank says, reminding the government, “Nearly one-third of the country’s territories are affected by LWE, causing huge loss to the economy and compromising its service delivery machinery.”
It adds, “Security efforts need further reinforcement in terms of better coordination among states and the Centre and improved intelligence and policing. Developing a comprehensive surrender package is also the need of hour to neutralise threats from LWE.”

Comments

samir sardana said…
Yes just like the Russians chose Pipapav for the Indian Navy frigates

The Russian State has chosen the ADAG company Pipapav to make frigates for the Indian Navy - inspite of PSU Shipyards having won tenders at much lower cost and that the PROVEN FACT that the few private sector Yards who bid and won at rates lower than that of PSU Shipyuards - had made the bids as Strategic Bids to jump start capacities

o It is a upgradation project of 4 Talwar class frigates worth USD 3 billion
o The moot point is that having the largest shipyard in India cannot be the sole or primary or main driver for award of such a contract
o RELIANCE NAVAL HAS A ANNUAL LOSS OF RS 1500 CRORES WHICH IS MORE THAN 2.5 TIMES THE TURNOVER OF GOA SHIPYARD
o RELIANCE NAVAL HAS DONE A ASSET WRITE OF RS 10000 CRORES IN FY 2019
o IF GSL IS WINNING CONTRACTS ,BY BIDDING AGAINST KOREAN AND CHINESE SHIPYARDS,THEN WHY DID IT NOT DO COMPETITIVE BIDDIG FOR THE RUSSIAN CONTRACTS WITH DSIL ?

THE DIRE STRAITS OF INDIAN SHIPYARDS IS CAPTURED BY GOA SHIPYARD LIMITED (GSL)

At the outset it might be stated that more than 50% of the profit earned by GSL in FY 202O was earned from Interest Income (Rs 124 crores) and Grants ( Rs 26 crores) and the aggregate provisions for credit losses to GSL as at FY 2020 was Rs 119 crores.Besides the massive expense on the Indian Navy and Coast Guard is requiring GSL to expend large sums on capital acquisitions (Rs 170 crores in FY 2020)

There is an exponential increase in the managerial and technical excellence demanded of GSL by the GOI to comply with the needs of a Blue water Navy and the needs of Naval Project 75 and the Project 1135.6 of the Indian Navy – REQUIRES AN EXCEPTIONAL MANAGEMENT ,ORGANISATION STRUCTURE AND SYSTEMS AND PROCESSES.

The IEM by Vice Adm Ashok Vishanath Subedare for IP is NOT A SUBSTITURE FOR THE PRECEDING INFORMATION.HE IS A RETIRED NAVAL OFFICER.

It is also important to assess the technical competency of AN AUDITOR (WHO IS A CHARTERED ACCOUNTANT) to do the audit of a defense contractor,whose contracts and terms are couched by security,secrecy ,NDA and a non-compete situation with monopoly suppliers.dindooohindoo

It is also in public interest to review the operations of GSL considering the conflict of interest which is inevitable when retired Naval officers are running GSL and the contracting agency and the agency making the specifications and the RFQ/RFI/RFQ are serving Indian Naval officers.

In essence,the Indian Navy is heading into the South China Sea,with a poor back end,which is in the hands of bankrupt private sector players and inefficient PSUs.

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