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Friday, March 25, 2016
(The Rot N Sloth in the MoD ?)The Great Whitewash By the Ministry of Defence – By Lt Gen PC Katoch (Retd)
NEW DELHI: During a
press conference on March 4, Defence Minister Manohar Parrikar made a startling
announcement, revealing he had discovered India was paying the US Department of
Defence (DoD) for new weaponry, even though US$ 3 billion which had been
earlier paid by MoD was piled up and lying forgotten in a Washington account.Despite Parrikar stating this at a press briefing, the issue
curiously didn’t find mention in national dailies. MoD had reportedly put the
said money in a Pentagon account for weaponry that was to be bought under the
Foreign Military Sales (FMS) agreement. This is the shortest way of procuring
weaponry from the US under which the DoD procures equipment on behalf of the
foreign government from US vendors. The US opened up FMS sales to India in the
immediate aftermath of the 9/11 terrorist attacks.
It is unclear when the money was paid by MoD but if it was piling
up in Washington, it obviously was paid over a period of years. US$ 3 billion is not a small amount considering that in rupees today it amounts
to some Rs 20,100 crores. How could it be “forgotten” if FMS procurements are
supposed to be in quick time? Isn’t it intriguing that such a large amount
lying unspent and earning interest money for the US was not once pointed out by
the Comptroller and Auditor General (CAG)? Of course
if the CAG is a former Defence Secretary who himself was party to such stashing
away of defence money in his former avatar, he obviously would remain mum.
It certainly raises a stink that needs to be thoroughly
investigated by the CBI. What military modernization could have been done with
US$ 3 billion can be gauged from the fact that INS Vikrant, India’s
indigenously built aircraft carrier launched in August 2013 was at a cost of
US$ 7.7 billion. Parrikar referred to the lapse as “because of ill-management
or lack of attention to this account”. Did this comment indicate a lid was to
be put on the issue in the exuberance of this new find of forgotten billions?
With reference to the above, the Press Information Bureau (PIB)
has now come out with a statement which says MoD has fine-tuned FMS procedure
with the US Government where all the bills have been pooled together in a
corpus; so for contractual obligations the said amount is being withdrawn from
the corpus - payment is being effected from the corpus of 2.3 billion US
Dollars. The PIB release adds, “This has happened through scrupulous and
holistic financial management. Consequently, while US government will continue
to meet their contractual obligations, there will be no additional burden on
Government of India on this account”.
But under what regulations does MoD have the mandate of creating a
corpus abroad to the tune of billions of dollars, especially when Parrikar
clarified on March 4 that this $3 billion stash was not earning any interest
for India. If , as the Defence Minister refers in an open forum, the lapse was
“because of ill-management or lack of attention to this account”, without doubt
it is ill-management because such an amount can’t simply be forgotten”.
On the contrary this was most likely a willful act. It does seem
that billions of dollars accumulated like this over years with the CAG not
pointing out the lapse could have ulterior motives? What if it was “forgotten”
for a few more years? The question also arises whether there are more such
stashes abroad, a possibility which exists with CAGs failing to point this out
The question begging an answer is how come within a fortnight of
the Defence Minister’s remarks about “ill-management”, the government is
patting the bureaucracy of MoD on the back for “scrupulous and holistic
financial management”? What an incredible whitewash by the MoD? What next?
Awards for this stupendous feat, perhaps a cash award or allowance for
Scrupulous and Holistic Financial Management? After all if the 7th Central Pay
Commission recommends Rs 45,000 per month for a civil servant just to be posted
at Shillong, scrupulous and holistic financial management of this type deserves
many times more that paltry sum.
What the MoD has tied up with US about the corpus (PIB release)
obviously is post discovery of the lapse by the Defence Minister. So, if the
guilty instead of being punished are being given a pat on the back it simply
leads to just one conclusion – the current dispensation like all previous ones
is incapable of undertaking vital administrative reforms because of the vice
like grip of the bureaucracy and the rampant corruption in the defence and governmental
That is why the MoD simply blocks out the military’s
recommendations to the 7th CPC. That is why successive CPCs have degraded the
military to the best of their abilities, with the 7th CPC taking the cake. That
is why 28 anomalies of the 6th CPC pointed out by the military have not even
been addressed. That is why while violent quota protest causing crores of
rupees loss to public and private properties evokes a response from the Govt in
that the issue will be taken up in the next Parliament session, military
veterans peacefully protesting at Jantar Mantar are baton charged by the police
and the Defence Minister refers to the protesters as holding a gun to the head
of the Govt.
A survey in The Hindu had reported, “...while the Army continued
to be the most trusted institution. The civil service was perceived as the most
corrupt, more so than local, State and Central governments“. The political
leadership allowing the bureaucracy to weaken the morale of the military will
cost the nation dear in terms of national security, as the military is called
out by the state and central governments as their instrument of last resort, to
pull the chestnuts out of fires frequently caused by a combination of political
chicanery and bureaucratic incompetence-cum-corruption.
The civil-military divide has become the widest under the present dispensation,
quite visible on national TV channels, which is making our adversaries
Rather than taking refuge behind the Make-in-India allure, the
Defence Minister needs to muster courage and address the much needed
reorganization of the higher defence set up including the MoD bringing in
military professionals. It is disheartening to note that the Defence Budget 2016-2017
is the lowest since 1962.
But getting back to the $3 billion stash, the Defence Minister
should have pushed for institutionalizing the recommendation of Parliament’s
Standing Committee on Defence recommendation of April 2015 . This is for a
“non-lapsable and roll-on allocation” fund for 5-10 years for defence
equipment, administered by experts with strict controls on timelines to reduce
bureaucratic hurdles and be more attuned to practical realities.
(The author is veteran, Special Forces of Indian Army.)
(Source- Via e-mail from A Sunder Rajan, Vet / The Citizen, online daily)