The latest episode in the South Block’s mystery serial centres around the emergency financial powers ‘granted’ by the Ministry of Defence’s (MoD’s) Defence Acquisition Council (DAC), on August 22, to the armed forces for the next six months to buy urgently-needed materiel for immediate operational employment.
However, one needs Hercule Poirot, the fiercely-moustached fictional Belgian detective from Agatha Christie’s whodunnits, to try and solve the secret behind this delegation of power that seems locked in an enigma within a conundrum. The facts of this cliff-hanger, as Poirot would inscrutably say, challenge the little grey cells, mon ami.
This latest financial fiat emanated against the backdrop of the Indian Army’s (IA) stand-off with China’s Peoples’ Liberation Army (PLA) along the disputed Line of Actual Control (LAC) in Eastern Ladakh, which has endured since May, 2020. What, indeed, is even more surprising is that over two years later, the services, particularly the IA, remain in the process of procuring ‘urgently-needed’ equipment to make good the gaps in their materiel inventories.
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According to media reports, the services have, once again, been authorised to exercise these purchasing powers multiple times over the next six months to acquire diverse equipment, preferably from indigenous sources, worth up to Rs 300 crore each time, via an abridged fast-track procedure (FTP) to hasten procurements. One proviso, however, requires equipment thus acquired to be inducted into service ‘within months’ of the buy, a period which could probably stretch up to a year.
But this is nothing new.
The IA and Indian Navy (IN) vice-chiefs of staff and the deputy chief of staff of the Indian Air Force (IAF) have enjoyed financial powers for the past 15 years to procure equipment from local and foreign vendors from their respective capital budgets. In 2007, the financial limit was first pegged at Rs 10 cores, rising 30 times over the next 12 years to Rs 300 crore in February, 2019.
The ambiguity is that these financial powers were not delegated for any specific period and hence could not have elapsed, warranting their renewal by the DAC earlier this week. Therefore, its puzzling why these very same powers have been ‘granted’ yet again for the next six months when they were already in play and valid.
To add further to this riddle, similar ‘emergency powers’ were, once again, accorded to the three services after the 2019 terrorist attack on a paramilitary convoy in Pulwama in southern Kashmir, in which 41 people died, to buy whatever equipment they needed to deal with the security situation along the Line of Control (LoC) with Pakistan and for counter insurgency operations (COIN).
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Oddly, the FTP was also initially promulgated in September, 2001 to meet urgent operational requirements, even though the services had not been delegated the financial powers for capital purchases at the time. However, they later became entitled to pursue the FTP route once the financial powers were delegated to them, 2007 onwards.
Considering that the services were already authorised to follow the FTP to expeditiously buy equipment annually up to Rs 300 crore as many times as they needed, subject only to availability of funds, even Poirot would rightly deduce that the DAC’s July 22 directive was jejune.
But that still does not rob it of curiosity or speculation and with all such instances, especially with regard to weighty matters like materiel procurements, there are some possible explanations, albeit feeble.
One such explanation is that the DAC, which is procedurally required to give ‘in-principle’ approval for all acquisitions via the FTP, has relinquished its authority to the services, leaving it entirely to the latter to decide what equipment and ordnance needed buying, and how to go about acquiring them.
If so, this would, in effect, mean that the services would be free to import urgently-needed kit through the FTP conduit, which otherwise needed DAC authorisation, according to an April, 2022 amendment to the Defence Acquisition Procedure-2020 (DAP-2020).
The other likely explanation is that the financial powers, which till now were being exercised by the vice- and deputy chiefs of staff of the three services, have now been delegated to the Army Commanders and their equivalents in the other two services, who have also wielded ‘Special Financial Powers’ for over two decades to effect revenue purchases to remain operationally active.
Whatever be the reality, the DAC’s July 22 decision was seemingly a brazen admission of the MoD’s inability to ensure the timely acquisition of varied military equipment though the DAP-2020, and all its preceding editions, since 2002.
To put it succinctly, this is a damning self-goal by the ministry, but good for the services if it results in faster equipment procurement, especially for the IA, which is readying to deploy along the LAC in harsh wintery climatic conditions in Ladakh’s cold desert for the third consecutive year.
Perhaps, it’s also time to holistically re-examine the 657-page DAP-2020 at the present juncture when India faces serious military threats along its vast unresolved frontiers.
Amit Cowshish is a former financial advisor (acquisitions), Ministry of Defence.
