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Home > News > Columnists > Sundara Vadlamudi

Auditing India's Strategic Sector

February 18, 2004

The defence reforms initiated by the Bharatiya Janata Party-led National Democratic Alliance in the late 1990s produced several welcome changes in the defence policy making process. It led to the creation of a National Security Council to facilitate long-term strategic planning and ensure continuity in the formulation and implementation of security policies. The Pokhran-II nuclear tests in May 1998 and the subsequent decision to pursue weaponisation led to further changes.

The government formed a Nuclear Command Authority to manage India's nuclear arsenal. The NCA is the umbrella organisation comprising the civilian leadership and the military infrastructure needed to design and implement India's nuclear policies. The government also created a Chief of Integrated Defence Staff to serve as a single point interface between the armed forces and the civilian leadership.

However, the strategic sector comprising of the Defence Research and Development Organisation and the Department of Atomic Energy has been largely untouched by the reforms process. The first step towards addressing this deficiency is to institute a periodic and systematic audit mechanism for the strategic sector. The audit must investigate the economic and technical aspects of the projects currently handled by the strategic sector. Not surprisingly, the defence reforms package did not broach such a concept.

The reasons for avoiding such a delicate issue are not hard to fathom. The initial projects undertaken by the strategic sector, especially by the DRDO, ended in failures and such failures were couched in euphemistic terms like 'technology gathering' to cover them up. Naturally the civilian leadership and the strategic sector did not consider the concept of an audit mechanism since it would have opened a can of worms regarding the functioning of the strategic sector. Second, the secrecy surrounding the projects handled by the strategic sector precluded any public scrutiny.

Third, top scientists from the strategic sector have served as scientific advisors to the civilian leadership and wielded significant influence on decisions regarding strategic projects. It is therefore possible that successive scientific advisors used their influence to discourage proposals for implementing a comprehensive audit mechanism since it would have been potentially harmful to their interests.

Fourth, the DRDO and the DAE are placed on the high pedestal of patriotism and questioning their capabilities is considered tantamount to undermining India's technical competence. Homi Bhabha, A P J Abdul Kalam, R Chidambaram are considered national icons who could do no wrong.

The lack of proper oversight over the strategic sector has resulted in the domination of the policy making process by key members of the community involved in the nuclear weapons program and the strategic missile projects. Managers from the strategic sector have become both the advisors and implementers of strategic projects. The civilian leadership therefore receives inputs from the scientists within the strategic sector and does not possess any mechanism to verify the evidence presented by the scientists. The lack of any feedback from independent analysts confines the defence policy-making process to a closed loop. The decision-making process regarding these strategic projects is at best ad hoc and personalised.

The lack of an oversight mechanism has also resulted in a highly centralised style of management within the strategic sector. Top managers within the strategic sector tend to take decisions without proper consultations and dissent against the top management is usually stifled. For example, the government has declared a moratorium on further testing based on the advice from former Atomic Energy Commission chairman R Chidambaram.

Chidambaram has indicated that the tests in May 1998 yielded sufficient data to preclude any further testing. Several scientists, however, have stated that the safety of India's nuclear weapons stockpile might necessitate further testing. The government declared the moratorium on further testing even before the scientists had a chance to study crater morphology and conduct radiochemical analysis of the nuclear test site.

The question that we need to be asking ourselves is whether this lack of accountability of the strategic sector will enhance or hamper India's national security. Budgetary and technical oversight of the strategic sector will greatly assist in improving indigenous defence production in India. An option for increasing such an oversight is to institute a systematic and periodic audit for the projects undertaken by the DRDO and the DAE. Several factors indicate that a periodic and systematic audit process will be beneficial for India's national security.

First, any audit process is likely to assist the policy makers in analysing the advantages and disadvantages of pursuing a specific strategic project. Quite often policy makers face the 'Make or Buy' dilemma. Crucial choices have to be made between indigenous production and foreign procurement. The strategic sector has done a good job in linking indigenous defence production with a sense of patriotism. As a result, the civilian leadership and the bureaucracy have repeatedly endorsed the claims of the strategic sector regarding its capacity to indigenously produce any item for the armed forces. Although the aim of achieving total indigenous production is a noble one, it is also critical to identify our strengths and weaknesses and develop a more effective defence procurement strategy.

Second, an audit will reveal the inconsistencies within the existing strategic programs and will provide means to streamline the system. India's defence projects have long been associated with missed deadlines, excess budget costs, and long development periods. Projects such as the Advanced Technology Vehicle, the Sagarika ballistic missile, and the Light Combat Aircrafthave faced chronic delays. An audit mechanism will serve to identify potential weaknesses in the current development cycles. According to an audit by the Comptroller and Auditor Generalof important DRDO projects for the period till 1998, the Light Combat Aircraft project incurred a whopping Rs 20 billion expenditure without any significant progress towards completion.

Please read: Chinks in the Armour

Third, such an audit will provide an effective system of checks and balances to prevent the hijacking of decisions concerning strategic projects by a particular entity. Despite the absence of an extensive US style military industrial complex, the history of India's indigenous defence projects reveals the influence of special interest groups in the decision-making process. A periodic audit of the strategic sector will prevent the manipulation of policies by any special interest groups and will provide an effective oversight to curb such activities.

Fourth, constituting an audit mechanism will ensure greater transparency regarding government policies and will instill confidence among the public on the proper use of funds. India prides itself in being the world's largest democracy and it behooves the nation to act in a manner that justifies the label.

In the past, critics of India's defence policies have pointed to several shortcomings in the policy making process. The non-involvement of the military in policy planning, the lack of institutional processes, and ad hoc and personalised style of management are some of the weaknesses pointed out by critics. The defence reforms initiated in the late 1990s have begun to address some of the shortcomings. The military is getting involved in the decision making process, strategic threats are being analysed in a systematic manner, and the management of defence policies is becoming more institutionalised.

Oversight of the strategic sector is an issue that has not received the attention it deserves. Instituting an audit mechanism for the strategic sector should not be interpreted as an attempt to undermine the efforts of the strategic sector. Rather, it is an attempt to identify potential weaknesses and rectify them. Auditing of costs will check runaway expenses and keep the costs from spinning out of control. A technical audit will ensure that the projects meet the Quality Requirements of the end user, i e, the Indian armed forces.

It is highly unlikely that India will meet the target of Plan 2005, a ten year plan initiated by A P J Abdul Kalam to strengthen India's military industrial base. However, adopting the right set of steps like instituting a strategic audit will help to strengthen India's defence production capability at least by 2015.

Sundara Vadlamudi works at the Center for Nonproliferation Studies, Monterey, California

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Number of User Comments: 2

Sub: Gud Work !!

This is a gud article !!

Posted by Puneet

Sub: Defence Industry

Good article! The signals are clear. Now it is for the policy amkers to decide on the kind of audit. Definite studies in this area ...

Posted by S Shivesh



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