TALK ON MILITARY TECHNOLOGY, GOVERNANCE AND ACQUISION PROGRAMME: IMPACT
        ON NATIONAL SECURITY BY AIR VICE MARSHAL SAMIR K SEN (RETD) AT USI ON 9TH APRIL 2008
 

Dear Sir,
Apropos above lecture delivered on 9th April 2008 at USI.

The speaker dwelt upon his contribution to the various projects under taken during the course of his association with the R&D organization He at length spoke about the nuances adopted in UK; USA and efforted a comparison vis. a vis working in India He referred to beaurucratic hassles in various research organizations and duplication in research work. He finally advocated one single technical head for such a task. Following are the observations
Firstly comparisons between the countries are odious. There will never be similar, much less identical factors affecting solutions. Secondly, that these organizations be always headed by technical heads is fallacious. Tomorrow, it may be argued that the Defence minister be a person only from the Forces. In our present scenario, the decisions of national importance are taken jointly by cabinet committees having over all view of the situations - political, economic and others. Similar is the case where IAS personnel are heading these organistions I recall an Officer in uniform, heading nuclear command, who interacted with the Security advisor Late Mr. Dikshit ‘commenting that the fellow knows all the nitty-gritty of the subject, and present space it occupies in the national spectrum. I also know, a person who topped in Engineering from Thomson College Roorkee, did his post-graduation from Uk and joined IAS. IFS & IAS are normally well up academically, develop overall perspective of the conditions prevailing in various fields and bring to bear their experience in taking decisions(exceptions notwithstanding) Thirdly, the association of the ‘user/consumer’ from early stages will be of immense help to straighten and channelize the research. Fourthly, Private and Public enterprises may be allowed to undertake the task of research, encouraging healthy competition and quicker faster results. Finally a study in the working of research organizations, can help avoid overlapping. A telling example given by one in the audience that R&D having promised for the infantry soldier a particular weapon for the last 12 years has ‘not yet delivered the same. Let it be a guiding instance to egg on every one in the field of Research.

Inder Tejpal (Profle –served 7 years in Allied Services, 20 years in the Army and 20 years as an advocate)
 

 Talk by Air Vice Marshal Samir K Sen (Retd) on the subject "Military Technology, Governance and Acquisition Programme : Impact on National Security" at USI on 9th April 2008.

In his excellent presentation AVM  SK Sen made a strong  case for Corportasition of Indian Defence Industries into a Board under one head with all necessary powers including financial as stand alone from DRDO to bring to timely fruition a vital defence project  without time and funds overruns. He had the American Model in his mind, having visited/associated with some Corporate Head Quarters like Boeing, etc. But some how he did not focus on other parameters of his Talk.

Naturally Q&A by itse is not sufficient to put forward one's views. Though the Chair in his summing up stressed not to overlook ground realities in India and emphasised the importance of centrality of coordination of  various Agencies engaged in planning and production.

There are many issues which need fuller debate.

For one it is dificult to agree that the Command Officers do not fully comprehend the technical and technological complexities at the drawing board stage and in subsequent production or procurement. And when passionately embracing the Corporate Board concept, it was more to say that only Technical Officers should be the Chairman of Board of Directors for these Projects with full Powers including Financial.

Corporate Board concept is not the only way for deliverance of a timely completed project in a given timeframe and later for smooth induction into a Defence Service. General Eisenhower on retirement as President bemoaned two things. One he warned his successor President Kennedy about the vice like grip of politicians, bureurocracy, intelligence agencies, military and industrial complexes on the Administration. Second the General admitted it was a mistake to issue a Memo for  indoctrination of the American Forces andthe people consequent to some defections from the USA Armed Forces during the Korean War! During my visits to erstwhile Soviet Union as merchant mariner, I used to be baffled by similiar questions being asked by everybody in USA as well. One knows that it is routine in USSR but the same was the case in USA. Same shadowing processes in both the countries were followed. This happens in USA every time one visits USA even today. Something similiar is what India's Left speaks and does. One wonders if Americans would have gone to Iraq if the Corporatisation of Defence Industries which is almost absolute was not the cause with the known backing of Neo Conservatives.

To quote, Adimral Shekhawat Retd who was in USA at the time of 9/11 visiting his Children [and he also was then Memeber of National Security Adivisory Council], whilst speaking at USI or Naval Mess Varuna that he could not get  any clear picture till he returned to India. Such is the power of their media! I used to read in the afternoons at the District Library in USA during my visits. And I would listen to my Son talking to his Mother about what goes on at their Board level and also about the corporate governance. He also gives talks at Business Schools and is consulted by the Wall Street Analysts who pay him for chatting with them for half an hour or so. He is both technical PhD and Business MBA. Impression that I carry that the Corporate world there knows in advance what changes are being brought about in India to suit them!

I believe the Command Officers atleast in the Navy are well groomded to comprehend the technical and the technological complexities because of the system of training. Three years in NDA, atleast in our times, equipped the high average cadets with sound academic knowledge.
At that time the motto was that a NDA Cadet should be able to do anything under the Sun. During the Navy Training as Cadet and Midshipman, it is the technology trainging that one gets at the practical level that becomes very usful later on. Ofcourse the optees for Engineering and Electrical careers branched off after six months of training as cadets. As part of training, we visited almost the best of industries in the then Bombay or the Foreign Men of War who called at the Indian Ports. The theoratical technology traing comes during the SUBS Courses of 1 year at various shore establishmensts. With the induction of Soviet origin warships the type technical and technology training at the Petya School at Vishakhpatnam as per the Russian system took the Naval Officers to nearly top level warship technology. During Bharat Darshan, whilst doing the Staff College at Wellington, we visited BARC where the Atomic Scientists gave us the low down on nuclear plant with an opportunity to stand atop the Experimental APSRA Reactor if I recall correctly. And then went to visit Electronic Corporation of India at Hyderabad. Earlier as Naval Cadets on board the Training Ship we visited the KUWAIT Oil Company in Kuwait, Iranian Oil Company at Abadan and the ARAMCO in S Arabia with practical visits to oil wells and refineries. They were all power presentaions in those days and no questions were out of bounds.

I did mention about my 3 years stint at the Directorate of Acquisions Navy 1973-75. I was asked to set up Record Cell in the Directorate. I did get hold of Top Secret Agreements and Contracts of the other 2 Services. And also was trying to look at the same from the Civil Ministries. That helped in making Draft Agreements and Contracts from the Indian Navy side before the Soviets could come out with their Russian Translated versions which they were loath to alter later on during negotiations. As a bonus I was asked to sit at the high table with the RM Sardar Swaran Singh Delegation during the final formal negotiations and then concluding the Protocols and the Contract for the 2nd Round of Navy's Soviet Acquisions. My opposite number in the Soviet DM Delegation was a technical Colonel sitting quietly in the other corner like me and watching the proceedings.

During my 2nd stint of 3 years at NHQ I was Deputy Director in the Ship Building Directorate known as Drt. of Leander Project. I brought my experience of Soviet Acquistions to building of warships at the three Navy Shipyards at Bombay, Calcutta and Goa. Ofcourse there was tremendous resistance. I was against adopting HAL type Contract of 1  page between IAF and Hindustan Aeronautical Ltd. Sure fuller Contracts came into vogue but the system and the mindset did not change. The Shipyards wanted that Corpotrate like Board functioning without accountabilty! Particularly at Calcutta, without even laying the keel they wanted payments upto half the stages. As their Cheques were bouncing. Naturally I left the Navy on premature retiremnt.

At this point I need to come to personal level to clear the record as I know it. I missed 1st Look for promotion to Selective Rank of Commander. My well wishers spoke to me and asked me to continue with my hardwork. It took a group of 10 Naval Captains who used to lunch together at 'A' Block and 3 Admirals including the Vice  Chief to ensure that the System was righted and I was promoted during the 2nd Look. Infact I was sent to meet up the Vice Chief without telling me the purpose. For the promotion to Captain Rank instead of sending me to Sea, I was appointed to Warship Production in Delhi. Enroute in the train I met up with newly promoted Captain who was on his way to Delhi for taking over as Director of Personnel and he asked me to look him up after a few weeks! He went on to become Naval Chief later on.

After collecting my 3 annual negative 'Looks' I asked for Premature  Retiremnet. I knew it was coming. I recall the Liason Officer of one of the Yards who was an ex-Deputy Secreatary level from Ministry of Fin/Def. That what I expect personally for putting up files for stage payments. He offered a job in Min of Def as Director Ship Building as the incumbent Commander had died during train journey--he was known to imbibe plenty of Rum. I just asked him if he could get through my File for retiring early. My Director who later went on to become CMD Mazagon Docks and COM, told me he could help me to go to Planning Commission where my talents could be used better. My own Father who had retired from Police/and Intelligence and was deeply pained by my desire to go to Merchant Navy, asked me that if I agree, he could have me move over to RAW. That is the first time I knew of his powers even post retiremnet coming as he did from his humble rank of DSP, though brillaint 1st class 1st always. I explained to my Father it would still mean stagnation because of the Navy's signatures. And I needed money for education of Children and a house and my responsiblity towards them.

Honesty is a weapon of self destruction of family which many may not understand!

My letter simply stated that order maintain highest traditions of the Navy and to protect my personal honour on being superceded, I may be permitted to proceed om Premature Retirement. During my last 2 months I did go to call on DOP and he told me he had asked me see him a few weeks after joining. I remained loyal to Material Branch. During these 2 months I wrote two Service Papers. And after taking up due appointments, I made over them to then COP at Delhi and Commander-in- Chief WNC during my last visit to Bombay. And may be to one more person; I do not recall. Later it had the the desired effect. A powerful Controller of Warship Production came into being including Directorate Of Contracts under him.

Thus now after retirement as a Commander and being of age over 65 I should be allowed to have my say. But at times somehow one gets the impression to the contrary. If I did not compromise on my honour then what is the need now. I can think without limits imposed and visualise at the nano level without the barriers of of logic and come up with different answers. Most times events play out to where nearly I was.

Post retirement, I had the permission to visit the next 4 Navy Chiefs by taking appointment through their personal Staff if I had any ideas or something like that for the benefit of the Navy. Three Admirals under whom I had served earlier helped me to enter and sustain my merchant navy job. I lost my Father and Elder Brother within 5 months after retirement and these 3 Flag Officers helped my Family in all difficult situations till I suprannuated from SCI. I am satisfied with what Navy has done for me. Ofcourse for some years now I avoid meeting up with serving Service Officers in Uniform for obvious reasons.

Coming back to the main issue, I think the Government of India is moving in the right direction in Defence Production and Procurement.I believe in keeping with our Grand Strategic interests, the commanding heights in arming our defence forces should be held by the Government. But the Centrality of erstwhile Soviet System should be avoided simply because it was financially crippling the Soviet Economy.

Despite the rules of the game of WTO, the advantage of  15 % extra leverage over universal quotations for procurement in arms must remain in abeyance for our PSUs including defence, atleast for some more time. Principal is that there should be no descrimination in Indian and foreign suppliers except as provided for. On the other hand our R&D is a known laggard! By allowing 26% particpation by Private/ Public Partnership with Defence PSUs who in turn can have equity or other partnerships with foreign MNCs, the defence industry should get due impetous. 26% equity holdings confer negative veto power to the Private Partners in the sense they must give affirmative response to policy proposals,etc. In due course when the system takes roots their share can go upto 49% equity for private partners that may include foreign MNCs.

Lately for defence acquistins the Govt is asking in Letter of Interest 30% of the cost of the Contract to be invested in India including transfer of technology. For Helicopters purchase they have raised this to 50% now. Our DRDO and PSUs and Indigenisation efforts are weak links. Infact early last year I had suggested at a Seminar to our Honourable Commerce Minsiter in the Chair that in what ever shape Doha Round of WTO is concluded, there would be assymetry to the disadvantage of the Developing Countries and the Least Developing Conutries that would keep widening expontially. Please raise reinvetsment level to 50 to 60% even when awarding civil contracts/ purchases like the Fighter Deal. Like the deals of over 100 Billion Dollars collectively for buying civil aircraft from Boeings and Airbus Companies. His answer was that the Govt had started thinking of monetising the assymetry in WTO negotiations. Informatively arms deal do not come under WTO and so also the civil aircrafts. Investments by supllying MNCs for training institutes and repair set ups are not enough. These should be spread to transfer of technology and supllies of parts and assemblies, etc.These supplies should be utilised in the manufactured products being made for us  and subsequent sourcing by MNCs to their supplies to other buyers as well.

The problems areas that remain are the centrality of coordination amongst Directorate of Plans, Directorate of Technicals and Technologies, the Directorate of Indigenisation, DRDO, the PSUs together with their Private Indian Partners[including their foreign colloborators], Defence Production and Procurement, CSIR and other Agencies that may get involved. There will  always be the crafty efforts to guard own turfs, change QRs, hide their bloomers and best endeavours to avoid commitment and lastly accepting no accountability.

PMO cannot be over burdened for obvious reasons. I think the Defence Projects should be assigned to Group Of Ministers[ GOMs] for oversight. The GOM can be served by a dedicated staff. They can draw up their own preceedures and processes to deliver the finished products in time without cost overruns to the front line forces in the paramount interest of National Security.

I think without thumping the table and repeated assertions, some elements of this ruberic need to be revealed from divergent angles that have direct and/ or indirect bearing on arming of our defence forces with competitive weapons if we have to take our destined position in the comity of Nations. No country can become great in the true sense by buying majority of arms from the others! I have tried to take on some in my write that follows.

Our Supreme Court has asserted more than once that our Constitution did not envisage concentration of all powers in one constitutional functionary. In USA all powers flow from the President who is a God's Appointee and then down the line. In a similiar fashion it happens even in the Business Boards, in practice. Though most times they are fair. That is how Supreme Court asked for three Election Commissioners in the EC instead of one and that seems to be working well. Most successful Boards in India also act collectively. Contrary to normal perception, Rattan Tata is a team man. Larson & Tubro is another case in point. Infact the real reason in the success of MARWARI/GUJRATI Businesses is that they get the best people on their Boards and listen to them. Mostly they keep verbal accounts in their head. Check it out. Their business skills are sharpened with 20 centuries of lineage behind them. Dhoni is another example. He gets the team's success with all the players cooperation. In American Corporates parlance, it is well known that the best disincentive is to fire them. Did the AVM mean that?

The Americans are pouring arms and money into Iraq with little real commensurate gains so far. Pentagon has never been fully behind the Political Leadership in their Iraq compaign. They wanted over 2.5 lahks minimum troops to go into Iraq War. Their Defence Secretary forced them into it. Today the Generals continue to back the Iraq War because they cannot accept the defeat of their reluctant Arms. Who put the Doctrine of Shock and Awe in Def Secy Donald Rumsfield's hands? Not the Pentagon! But the Neo Cons, the Industrial Boards, the Intelligence Honchos.

The Pentagon prepares itself with the capicity  to fight two conventional wars on two fronts. What they have in Iraq for War on Peace Phase that includes Terror is 1.3 to 1.5 lakh troops with many who have done more one rotation. There is a large presence of Reserves in uniform in Iraq. And equal number of Special Troops work under Secretary of State and the variuos Intellgence Set Ups. Today Pentagon, modelled on Corporate Board, is a Board without adequate number of fighting troops to match its ambitions with Arms that Corporate Board Czars have bestowed on it. Weapons Programme continues with increasing budget year on year for weapons rquired for Doctrine of Shock and Awe. Shortage of MenPower is not the business of Corporate Boards. The Commander US Forces in Iraq, Gen Peradious has asked his troops to get down from their well armored HAMVEES and fight on foot as they did in their days of Civil War more than two centuries back. And get the Sheikhs on their side, an old British Colonial Doctrine. And the Pentagon has now made Budgetary provisions for next generation of weapons with a bias towards terror. 

Interestingly the Iraq War is being financed indirectly by China and India amongst others. The coming generations of Americans are already burdened with more than 3 Trillion Dollars in debt. Cheap Chinese manfactures take care of their Low Middle Class people and below. Part of their earnings are reinvested by the Chinese in US Treasury Bills. India too does in a small way. That money partly finances the Pentagon Budget. Pentagon allocates hefty amounts to Corporate Boards for Arms manufacture and supplies. These are mutual captive feeds. In actual terms where is the real contribution by the Corporate Boards. Their cost and time overruns are no less alarming than ours.

To keep the people happy and bouyant, 500 Billion Dollars of taxes were returned to the payees to maintain the tempo of demand, inturn the growth of jobs, expanding the industries and services sectors thus keeping higher rate of GDP growth. That money is borrowed from coming generations. 20 million Americans who do not pay taxes became more poor. The story does not end there.

Sub Prime Mortgage bubble that burst is another twist which was a subterfuge for keeping the economy expanding and keeping poor in good humour. It is impossible that without the blessings of the Administration, the US Banks created more than 1 trillion dollars of their own paper money that is not reflectd on their balance sheets. And kept financing without colaterals for lending to the tax payers and the non tax payers to buy houses. The world renowned  debt rating agencies kept their banks ratigs high again without the Administration getting a wiff of it! By paying higher dividends, the Banks sold their own Paper Money or private Bonds if you wish to hedge funds and other Banks in the world to spread their risks. When it reached the level of burst, it came into open. The Indians particularly the AAM investors money vanished.

The IMF estimates the losses to be nearly a Trillion Dollars to day and that the markets would not stabilise before 2009. They also said no country would escape being hurt. This is not withstanding our FM repeats that our Fundamentals are strong. Our losses are more than the Chinese because , our PM asked for faster road map to full convertibilty of Rupee. And when the Stock Markets were crashing, they did not stop the use of Promisory Notes[PNs]  to show that we can take these investments in our stride. They booked their profits and left AAM Investors again with a heavy loss. Is it responsible action of US Banks' Corporate Boards?

The miseries do not end there. There is the question of depreciation of Dollar. Some years back USA stop putting in public domain as to how much currency they are printing and putting in circulation each year. Reasons are not clear. But they know that Dollar depreciation would reduce imports and increase exports. Our Fin Min and Commerce Ministries knew about it. The Oil Cartels are increasing prices for every cent od depreciation in a dollar. So they are scurrying for Biofuels and alternate source of energy. But that too requires some use of oil energy as input. And in turn that further reduces grain production thereby creating critical shortage in food.

Rupee appreciates, our exports earnings go down. Oil imports keep rising and exports and import gap keeps widening. So now we import more to meet increasing shortages. One does not have to go to Harvard and Oxford to learn these things. Higher prices are taking the wind out of the poor people. These things were surfacing when I used to read in Library in USA last year in September- October. Surely they knew about the shape of things to come here! The measures to bring down the rate of inflation would in the long run increase the budgetary deficit and the public debt. Expansion of GDP is vital for reducing poverty. But unequal distribution of created wealth is in fact increasing the gap between the poor and the rich.

The net result of these economic factors would increase the cost of projects. Shortage of funds invariable lead to time overruns. Same is true of arms imports as the Contracts have clauses for forec majeure in Soviet type contracts. And the Western Contracts where the quoted cost automatically gets raised as per their revised monthy wage bills as per their Unions Agreements and then there are other costs. What would a Corporate Head honcho do! In fact that is another weakness in our negotiations of contracts.

In short what would be my suggestions:--

MILITARY TECHNOLOGY
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GOVERNANCE
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In my think what structure would deliver the desired results commensurate with National Security.

ACQUISITION
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Having worked with Soviet Acquision in DAP, I recommend the Boss in each Service should have two or may be three Divisions under him. One for Acquisions from Russia and one from Western Countries. Others like Israel, Brazil, etc. can be lumped under seperate division. The same entities can be used for exports in reverse. Basically the culture and the philosophy in each group are very different. There should be horizontal link amongst the services so that duplications are avoided. And if any item has been procured under civil it should be tracked so that prices can be lowered.

IMPACT ON NATIONAL SECURITY
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Since Independence our Grand National Strategy in realty has been reactive to events. Unfortunately our Billioners do not put aside endowments for Independent Think Tanks who can compete with National Security Advisory Board. Today most are dependent directly or indirectly for Govt largesse in one form or the other.

Let us take the recent Indian Navy hosting Seminar for Indian Ocean Rim Countries. Unfortunately the Navy did not include discussions on climate change and its impact on Rim Countries, I believe.

There are 37 Countries who are now claimants to Indian Ocean heritage including UK and France. They have claims as per Law of the Seas which in some cases overlap or are in conflict with others. But our areas of interest go upto Antartica and from there to South Pole. In the North it is upto Central Asia. Though there seems to be no possible direct interest in Northern Route in Artic which is likely to become a reality in the next 1 to 2 decades as a consequence to global warming.  To the East upto the Mediterranian. And to the West upto South China Seas. Up sky is the limit. Atleast our Grand Strategy with our pretensions of becoming a Regional Power should think big. The vehicles for projection of that Power should be able to have that reach. No Power is going to help us with vehicles for this strategic reach. Infact our plans are approved at each stage in the gridlock of regional and global powers. That is the problem for our Nuclear Deal or inter continental missiles programme or submarine launched missile programme. And we do not have  sufficient uranium within our borders and no idea if it is in our sea claims.

I conclude here.

With best regards,

Commander Prem P Batra IN Retd.
Captain Merchant Navy Retd.
R/597
New Rajinder Nagar
New Delhi-110060
Tel: 28741551 & 42412362 and M=9873270079
Email: premprempb@rediffmail.com