angeldemon_007
SENIOR MEMBER
In the last few decades, defence procurement has suffered immensely due to allegations of corruption in defence deals, which were highlighted by political parties to run down the ruling party with political motives. As a result defence procurement has slowed down and the military superiority of India over Pakistan, which used to be a 1:1.78 has gone down to 1:1.28.
At a time when Pakistan and China are rapidly arming themselves and Bangladesh and Nepal are often moving towards belligerence depending on the party in power, it is vital that a political consensus is reached on acceptable procedures for defence procurement and a mechanism to monitor it. Politicians must stop airing their views irresponsibly and create an environment in which our armed forces can equip themselves adequately to meet the changing security scenario.
It is also time to realise that every report of the Comptroller and Auditor General (CAG) should not lead to immediate governmental action and handing over a case to the CBI. The controversy over Kargil purchases is a case in point. The report of the CAG, which went into the 123 deals during and after the Kargil War, had found irregularities in 25 defence deals. The government had convincingly defended its action in 23 of these cases when the CAG report was taken up by the Public Accounts Committee (PAC) of Parliament and admitted irregularities in the remaining two. Subsequently all the 25 cases were handed over to the CBI by the succeeding government. But after years of investigations, the CBI has now confirmed that in 23 of these deals no evidence of corruption was found.
The intrusion by Pakistan between February and May 1999 was carried out unobtrusively and our armed forces had no prior knowledge. When their presence was noticed, an ill-equipped platoon of the Indian army went to investigate and was wiped out. It was then the Cabinet met and ordered the forces to drive out the intruders.
The army chief complained that he did not have adequate equipment as the defence procurement process was extremely slow and cumbersome. As our forces were clamouring for essential supplies, could any government have allowed its territory to be occupied and continued to insist on following the normal procedure for procurement of essential defence supplies?
One of the questions raised by the CAG was why Kargil purchases were continued even after the operation closed down in July 1999. This is again a very short-sighted approach. Defence purchases are not on tap, which you close or reopen any time you like. Contracts take time to be negotiated and executed. The armed forces were in need of this equipment even before the Kargil crisis as it was essential to fill the gaps in the stocks of arms and ammunition. Further deficiencies had been noticed even during the Kargil operations. These had to be met.
No doubt the CAG is mandated to audit expenditure of every department and point out procedural irregularities and major deficiencies in finalising contracts or expenditure. Each department then prepares its replies often bringing to light facts which might not have been brought to the attention of the audit officers. The department also brings to the notice of the senior functionaries of the CAG, at the time of preparing preliminary replies to these preliminary observations, certain facts, which might not have been appreciated by the junior audit functionaries. As a result of discussions, certain audit paras are subsequently dropped. The final audit report is then published and submitted to the department concerned, the president and Parliament.
After this, the department gets another opportunity to present its views and replies to the PAC, which is tasked with the responsibility of taking a final view on the appropriateness of the expenditure. The CAG assists the PAC while the secretary of the department concerned, presents the viewpoint of the department. The PAC hears both the views, deliberates and then gives its recommendations, which are presented to Parliament.
Often the government decides, despite the observations of the PAC, not to accept some of its recommendations, giving reasons in its Action Taken Report (ATR). The PAC then considers the ATR and decides to drop some of the paras in which it is satisfied with the replies given by the government, and pursues the others with the government for compliance. This is the democratic process and gives an opportunity to the government to put forward its views.
If every government decides to initiate action straightaway on the alleged irregularities pointed out by the CAG, then Parliament need not give this task to the PAC. And if each such matter was referred to the CBI, the entire executive machinery will come to a standstill. Handing over of cases to the CBI merely on the basis of the CAG reports is setting a dangerous precedent. Whenever a new government comes into power it will do the same for defence transactions executed during the previous governments tenure and the position of every defence minister would be jeopardised.
A solution has to be found to get out of the mess. When the reports of the CAG and CVC on Kargil were being discussed in the Ministry of Defence, it was felt that it would be better to have a closer association with both the CAG and the CVC before finalising major defence contracts. Both the organisations were approached to scrutinise major defence deals (say contracts of `75 crore and over) before they are signed. Though both of them agreed initially, they politely refused subsequently when a formal proposal was sent saying it was not a part of their mandate and they would be only analysing the deals after they were transacted not before.
In France, there is an Overseeing Committee consisting of retired professionals and experts in finance, defence and public affairs to scrutinise all major defence transactions before the contracts are signed. Perhaps we could have a similar committee in India. This would act as an umbrella and thus prevent unnecessary harassment of the officials of the defence ministry as well as the armed forces.
We can also consider a separate parliamentary committee tasked with performing the functions of the PAC vis-à-vis the Ministry of Defence. It could co-opt members of the public who have specialised in finance and defence including former officers of the armed forces and officers of the Ministry of Defence. These members would bring about better understanding of defence and financial issues concerning procurement and help the committee in finalising its report.
Referring matters to the CBI after the scrutiny by such an independent committee would be more acceptable to officers in the ministry and defence services. This would also enable defence officers to work in a proper atmosphere so that those who are honest can work without fear.
Depoliticise defence deals | PAC | CAG | The New Indian Express
At a time when Pakistan and China are rapidly arming themselves and Bangladesh and Nepal are often moving towards belligerence depending on the party in power, it is vital that a political consensus is reached on acceptable procedures for defence procurement and a mechanism to monitor it. Politicians must stop airing their views irresponsibly and create an environment in which our armed forces can equip themselves adequately to meet the changing security scenario.
It is also time to realise that every report of the Comptroller and Auditor General (CAG) should not lead to immediate governmental action and handing over a case to the CBI. The controversy over Kargil purchases is a case in point. The report of the CAG, which went into the 123 deals during and after the Kargil War, had found irregularities in 25 defence deals. The government had convincingly defended its action in 23 of these cases when the CAG report was taken up by the Public Accounts Committee (PAC) of Parliament and admitted irregularities in the remaining two. Subsequently all the 25 cases were handed over to the CBI by the succeeding government. But after years of investigations, the CBI has now confirmed that in 23 of these deals no evidence of corruption was found.
The intrusion by Pakistan between February and May 1999 was carried out unobtrusively and our armed forces had no prior knowledge. When their presence was noticed, an ill-equipped platoon of the Indian army went to investigate and was wiped out. It was then the Cabinet met and ordered the forces to drive out the intruders.
The army chief complained that he did not have adequate equipment as the defence procurement process was extremely slow and cumbersome. As our forces were clamouring for essential supplies, could any government have allowed its territory to be occupied and continued to insist on following the normal procedure for procurement of essential defence supplies?
One of the questions raised by the CAG was why Kargil purchases were continued even after the operation closed down in July 1999. This is again a very short-sighted approach. Defence purchases are not on tap, which you close or reopen any time you like. Contracts take time to be negotiated and executed. The armed forces were in need of this equipment even before the Kargil crisis as it was essential to fill the gaps in the stocks of arms and ammunition. Further deficiencies had been noticed even during the Kargil operations. These had to be met.
No doubt the CAG is mandated to audit expenditure of every department and point out procedural irregularities and major deficiencies in finalising contracts or expenditure. Each department then prepares its replies often bringing to light facts which might not have been brought to the attention of the audit officers. The department also brings to the notice of the senior functionaries of the CAG, at the time of preparing preliminary replies to these preliminary observations, certain facts, which might not have been appreciated by the junior audit functionaries. As a result of discussions, certain audit paras are subsequently dropped. The final audit report is then published and submitted to the department concerned, the president and Parliament.
After this, the department gets another opportunity to present its views and replies to the PAC, which is tasked with the responsibility of taking a final view on the appropriateness of the expenditure. The CAG assists the PAC while the secretary of the department concerned, presents the viewpoint of the department. The PAC hears both the views, deliberates and then gives its recommendations, which are presented to Parliament.
Often the government decides, despite the observations of the PAC, not to accept some of its recommendations, giving reasons in its Action Taken Report (ATR). The PAC then considers the ATR and decides to drop some of the paras in which it is satisfied with the replies given by the government, and pursues the others with the government for compliance. This is the democratic process and gives an opportunity to the government to put forward its views.
If every government decides to initiate action straightaway on the alleged irregularities pointed out by the CAG, then Parliament need not give this task to the PAC. And if each such matter was referred to the CBI, the entire executive machinery will come to a standstill. Handing over of cases to the CBI merely on the basis of the CAG reports is setting a dangerous precedent. Whenever a new government comes into power it will do the same for defence transactions executed during the previous governments tenure and the position of every defence minister would be jeopardised.
A solution has to be found to get out of the mess. When the reports of the CAG and CVC on Kargil were being discussed in the Ministry of Defence, it was felt that it would be better to have a closer association with both the CAG and the CVC before finalising major defence contracts. Both the organisations were approached to scrutinise major defence deals (say contracts of `75 crore and over) before they are signed. Though both of them agreed initially, they politely refused subsequently when a formal proposal was sent saying it was not a part of their mandate and they would be only analysing the deals after they were transacted not before.
In France, there is an Overseeing Committee consisting of retired professionals and experts in finance, defence and public affairs to scrutinise all major defence transactions before the contracts are signed. Perhaps we could have a similar committee in India. This would act as an umbrella and thus prevent unnecessary harassment of the officials of the defence ministry as well as the armed forces.
We can also consider a separate parliamentary committee tasked with performing the functions of the PAC vis-à-vis the Ministry of Defence. It could co-opt members of the public who have specialised in finance and defence including former officers of the armed forces and officers of the Ministry of Defence. These members would bring about better understanding of defence and financial issues concerning procurement and help the committee in finalising its report.
Referring matters to the CBI after the scrutiny by such an independent committee would be more acceptable to officers in the ministry and defence services. This would also enable defence officers to work in a proper atmosphere so that those who are honest can work without fear.
Depoliticise defence deals | PAC | CAG | The New Indian Express