The Telegraph
Since 1st March, 1999
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- Political corruption distorts the process of defence purchases

In an interesting episode aired on NDTV a fortnight back, the defence minister, George Fernandes, expressed his concern about the prevailing state of fear among top bureaucrats in the defence ministry dealing with defence procurement. The episode pictured Fernandes discussing the state of affairs with a reputed editor, Sekhar Gupta, while dramatically standing on top of the Siachen glacier. The defence minister felt genuinely upset that he could not provide the gallant soldiers with certain essential support facilities because of the delays in decision-making in the government. He said that an atmosphere of fear had enveloped the ministry officials, who were worried that they would be taken to task in a subsequent inquiry about current decisions on defence equipment. The prevalent environment of accusations and counter-accusations and inquiries had made working in the ministry of defence a hazardous occupation, so to say. Officials in the ministry were literally chary of signing on defence procurement papers or at least delaying the process of decision. (The defence minister had also reiterated his views to certain newspapers.)

The defence minister has shown by his various actions how keen he is to establish standards of integrity and transparency in the ministry of defence. He has explored various ideas to make transactions more open to inquiries by Vigilance. He has even invited Vigilance to explore transactions dating back to 1985. It is doubtful whether such “fishing” expeditions will themselves help to restore confidence among the currently serving staff of the ministry of defence. The fear that years — and decades — after a transaction is completed, inquiries may emerge to sully reputations and cause grievous damage is in itself a potential cause for the psychology of insecurity among the defence bureaucracy and can inhibit decisions.

While journalists have played an important role in unearthing scandals in defence procurement, they have also highlighted the present paralysis of decision-making. The fact that defence procurement across the world accounts for billions of dollars makes it a playground for interested defence equipment manufacturers. Where “procurement” is the target, commission agents inevitably follow in its wake. Countries in the richer world attempt to sweeten the offers of industries located in their domain by offering concealed as well as unconcealed export subsidies, besides soft loans. The Merchants of Death — to use a phrase given currency during the Thirties — use all kinds of blandishments to get their orders. Political leaders of richer countries are also quite willing to use their diplomatic clout to arm-twist poorer countries to place orders on defence equipment manufacturers of their choice and thus help them nurse their immediate constituencies.

I may be permitted to recall the use of Westland helicopters in which the prime minister of Britain, Margaret Thatcher, made a grant of the entire value of the equipment to India. The then prime minister, Rajiv Gandhi, dared to look the gift helicopter in the eyes so to speak. He questioned its airworthiness and fuel efficiency, although no payment was involved. But, a grant is a grant and the gift was taken. Unfortunately, the gift proved too costly to maintain and accident-prone besides. I recall the late prime minister persuading the Britons to make a compensatory grant towards the extra fuel expense incurred in the form of an extra assistance, over and above the initial grant.

The defence ministry has tried to explore various means of making the process of defence procurement more transparent and yet businesslike. It has even floated the idea of a committee of “eminent” persons to review and assess such purchases. Whether in the present atmosphere of allegations, any “eminent person” will be willing to expose himself to the prospect of hot pursuit of allegations is doubtful. This idea may be a non-starter.

Equally improbable is the idea of introducing a Vigilance staff member in the group assessing the approving of the purchases. The Vigilance angle does not or should not come up as part of appraisal and approval. It has to concern the processes of influence-peddling that are outside the main transactions of specifying the equipment, assessing offers and deciding, although influence is possible at each of these stages. Whether “Vigilance” can stop the intrusion of influence without blocking decisions is doubtful. Decision-making on procurement is a task that has to necessarily involve the higher layers of defence staff in completing the process of technical assessment and the financial staff in evaluating the costs. What is needed is a set of decision rules that are clearly laid down and transparently implemented. This would more than meet the requirements of integrity and efficiency. The details of the “process” of assessment can be recorded, as is being done, and reviewed by Vigilance, the comptroller and auditor general as well as by the proposed committee of eminent persons, if such a committee is established. Beyond that, it is too much to expect a corps of senior bureaucrats to look forward to being always at the receiving end of inquiries, about transactions approved by a group of them jointly and transparently.

If a similar atmosphere of fear had existed when the Bofors purchases were made, the transaction would have fallen through and, judging by subsequent experience in battle, the country would have paid a heavy price for such failure. Whatever the merits of the debate on the irregularities incidental to Bofors, it is uncontested that the guns have proved their worth in the Kargil war. The country would have been at serious risk if the political leadership at the time of decision-making — particularly the late Rajiv Gandhi and his finance minister, V.P. Singh — who both signed the transaction, had refused to approve the purchase.

There is obviously urgent need to clean up the mechanism of defence procurement. The political leadership has to immunize the top bureaucracy against unreasonable pursuit, once all necessary procedures have been observed. It is, indeed, worth considering whether complaints against defence procurements are referred first to a committee similar to that set up on serious bank fraud, consisting of eminent defence personnel (retired of course), practising accountants and jurists, as well as a representative of the Central Vigilance Commission, who should sift the allegations before the bureaucrats are placed at the tender mercy of “fishing inquiries”.

The price the country pays for delays in decision-making on the defence front is high. Insidious as the problem is, it requires imaginative political leadership to learn to trust its bureaucrats and to let bygones be bygones. During the episode on TV, Sekhar Gupta referred to the chain of allegations and counter-allegations as taking on the character of a blood-feud. The defence minister agreed, albeit reluctantly, with this implication. The time has come to stop playing politics with defence procurement. By casting doubt on the integrity of the process, the failed competitor in the bidding process strikes a blow at the nation’s defence preparedness itself.

Perhaps, the question is more fundamental and goes to the root of political finance. Commissions on different procurements usually get shared ultimately with the political leaderships in poorer countries. At least, India can make a beginning by consciously abjuring the use of such commissions. True, one effort was made in this direction by Rajiv Gandhi. The practice apparently continues. Stories abound of rich country leaders not only corrupting the political leaderships of other countries but also indulging in a bit of self-aggrandizement under its guise. The case of the German chancellor, Helmut Kohl, who was caught with his hand in the honey-pot of defence bribes, is still fresh in the minds of all readers.

The interlinking of political financing and defence procurement-related corruption is at the root of the problem. Rooting out political corruption is the key to eschewing corruption in defence purchases, where contractors often cite alleged demands from political leaders in favour of their malpractice. The bureaucracy will then have no excuse to be afraid of saying “No”.

Fear of decision-making in the defence ministry is rocking the boat of defence-preparedness. The defence ministry should again work without fear if the country’s defences are to be secure. Fernandes has done a signal service by highlighting a problem that hits the core of our defence. He should himself take steps to solve the problem. All men of goodwill, irrespective of political differences, should help exorcise fear from the defence ministry.

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