Army intrigue and graft hits India’s defences

Unexpected troop movements near Delhi in January cause alarm

Concern about worsening relations between the army and government is graphically illustrated by a story that takes up the entire front page of The Indian Express this morning about two key mechanised military units moving unexpectedly towards Delhi at night in mid-January.

The government did not have the usual notifications about the alleged exercises, which have this morning been described by the government and army as routine training.

There has never been a fear in India of a military coup but, with a weak government and serious tensions with (and within) the army, the story raises issues that have caused serious concern today. Either some sections of the army – maybe the chief of army staff himself – were in a mood to cause alarm in Delhi, or the failure to notify the exercises amounted to a serious lapse of procedures.

There have been strenuous denials from the prime minister, defence minister, and many others that anything untoward or significant took place. The Indian Express is also being criticised for over-playing the story, especially since some of the facts had apparently been reported earlier elsewhere such as here  and there were some factual errors.  Despite that, the furore illustrates the current low point in army-government relations. 

The story raises questions about who in the army or government supplied the facts to the Express, and why. It harms the image of A.K.Antony, the defence minister, who has been facing a series of crises. It is possible that he is the target here, and also the target of other recent leaks concerning the army and the army chief, possibly organised by senior political rivals and defence companies hit by his oppostion to corruption.  Significantly, Shekhar Gupta, the editor, considered it important enough to put his name on the story along with other reporters, and to clear the whole of the paper’s front page.

India’s defence capability problems are getting worse and are often in the news for all the wrong reasons – despite occasional good events such as the launching today of the country’s first nuclear-propelled submarine. Most public sector defence equipment companies have been failing the country for years by not maximising the output of efficiently manufactured equipment. As a result, India’s defence capability has been crippled in many areas by outdated weapons, and the government has generally failed to act.

Now the government faces a bitter chief of army staff who has turned whistleblower on both India’s lack of defence preparedness and a controversial army truck contract, amid complaints from frustrated private sector defence companies that are blocked from obtaining contracts by a self-serving defence establishment.

You may notice that these two paragraphs are copied from the intro to last week’s article on the coal industry, with coal replaced by defence. I could of course repeat this trick many times but won’t. I’ve done it today because of the similarities of an ineffectual government and a deeply embedded public sector establishment resistant to change – the only difference being that many of the private sector players in coal are part of the problem whereas they are trying to be part of the solution in defence.

Top Indian defence companies in the Confederation of Indian Industry have appealed this week to the prime minister to set up a National Defence Manufacturing Commission within his office (PMO) that would do what the Ministry of Defence will not do and end the inefficient and often corrupt public sector domination of the industry. But they know this is unlikely to happen during the lifetime of the current government because of its lack of leadership both in the ministry and more widely.

Surely only a comedy film producer would accept a script where newspapers splash across their front pages complaints from a country’s army chief of staff about his battle tank fleet being “devoid of critical ammunition to defeat enemy tanks” and air defence being “97 per cent obsolete”, just as the president of the country’s most powerful potential enemy arrives in town.

Yet that is just what happened last week when General V.K. Singh, the chief of army staff, (above with Antony) hit the headlines while China’s president Hu Jintao was in Delhi for a BRICS summit along with fellow leaders from Russia (supplier of much of the defunct equipment), Brazil and South Africa – as well as the world’s top defence equipment companies attending Delhi’s big biennial DefExpo show.

A letter that Singh had sent to the prime minister on March 12 was leaked to the media on March 28. It named the tank ammunition and air defence problems and said the infantry had “deficiencies of crew served weapons” and lacked “night fighting” capabilities. Elite special forces were “woefully short” of “essential weapons”, and there were “large-scale voids” in critical surveillance and night fighting capabilities.

Earlier in the week, Singh had dropped another bombshell, claiming he had been offered a $2.8m bribe by another army general to buy what he claimed were faulty Tatra army trucks (Czech made for an Indian-owned UK-based company).

General Singh is a proud and frustrated officer because he has recently lost a long-running and widely publicised battle with the government over his age (60 or 59) and thus over whether he would retire this year or next – he will now go at the end of next month. Critics allege that he made the bribe and defence equipment statements to get revenge, and a gaggle of politicians and commentators called for his immediate dismissal.

But that reaction was unfair and was quite possibly partly encouraged by rival generals and defence companies anxious to devalue his bribe allegations. The battle over his age turned partly on who would succeed him as army chief and this involved, some observers say, rival Hindu-Sikh and caste loyalties. A different general would have taken over if he had stayed another year and that might also have favoured some companies more than others, as well as giving Singh another year to try to tackle corruption.

Some critics have said that Singh over-stated the army’s poor preparedness, but his remarks were not new (and he had nothing to gain by leaking his own letter). Two years ago, at the time of Delhi’s last biennial defence exhibition, I wrote here about exhibition conference papers which said that “most of India’s ground based air defences are obsolete” and that upgrades of basic artillery equipment were “ten years behind schedule”. The then chief of army staff had just said that 80% of India’s armoured tanks were night blind, and the draft of an imminent US report said that India’s arms purchasing “lacked political direction and has suffered from weak prospective planning, individual service-centred doctrines, and a disconnect between strategic objectives and the pursuit of new technology”.

Singh and Antony should be close allies because both are unusually free of corruption – something that cannot be said for a lot of other generals and politicians. But while Singh is a man of action and has tried to clean up some of the army’s corruption (thus antagonising other generals), Antony is a weak politician scared of taking decisions that might sour his clean image.

He had neither the will nor skill to deal with Singh’s age arguments when they started a couple of years ago, nor to speed up defence modernisation – though two days ago, under pressure, he did make some decisions to speed up arms deals. He is in fact believed to be in his current job only because he is trusted as a clean and loyal politician by Sonia Gandhi, head of the Gandhi dynasty and the ruling coalition who is thought to see him as a leading prime ministerial candidate if Manmohan Singh stepped down. In such situations, dynastic loyalty counts for more than ability.

India has an annual defence budget of $40bn, including capital expenditure of $15bn, and is the world’s biggest importer of defence equipment according to a recent report, accounting for 10% of global arms imports between 2007 and 2011. China was the biggest importer but its inward trade had declined in recent years because it has dramatically modernised its defence manufacturing industry, something India has singularly failed to do. India’s defence imports are officially put at 70%, but the actual figure is far higher, maybe around 85%, if imports made quietly by defence public sector corporations (DPSUs) are included.

That takes the story back both to the army chief’s bribe charge (involving Tatra trucks – not to be confused with Tata, India’s biggest conglomerate which also makes army trucks) , and to the Indian private sector’s wish to turn the figures round and make 70% of defence equipment in the country.

Tatra trucks controversy

Critics complain that, while Tatra all-weather all-terrain trucks (above on a Republic Day parade) are widely admired for their flexible-axle agility on rough ground, only 60% of their components have been indigenised in the 26 years that the trucks have been produced for the Indian army by BEML, a public sector company. The left-hand drive has not even been changed, and the trucks are said to be excessively over-priced.

Reports suggest that complaints about the trucks were suppressed by Antony and the defence ministry in 2009, though the army chief’s whistle blowing has led in the past few days to Central Bureau of Investigation inquiries into Tatra and its UK-based owner Ravi Rishi of Vectra (which represented Eurocopter in a bid for 197 army helicopters that was shelved in 2007). The army chief tried to stop the contract when he took over and is saidm to have backed a Russian-Indian joint venture, Ural of West Bengal, whose vehicles would reportedly cost less than half Tatra’s Rs8-10m ($170,000-$200,000) – other Indian companies might also develop rival vehicles.

Allegations of corruption and intrigue stretch beyond Tatra, Singh’s age, and the whistle blowing to other army scandals including Adarsh, a multi-storey block of flats built in Mumbai for top army officers and other public sector officials on land designated for war widows. This is one of many cases arising from the army being India’s biggest landowner with some 1.73m acres. Also linked are allegations that Antony’s office was bugged, and an unauthorised defence contract. These were covered in an unusual press release issued by the ministry that named the general allegedly offering the Tatra bribe to Singh.

Many defence public sector companies like BEML import unnecessarily large amounts of components from abroad and then assemble them into finished equipment, often operating in league with corrupt suppliers, intermediaries and officials who discourage research and development of potentially rival Indian products and components. Ajai Shukla, a defence journalist and former army officer, said on television two nights ago that the DPSUs “take the whole system for a ride” with defence ministry approving their plans without proper vetting or competitive tendering.

This forms a powerful lobby against the Indian private sector being allowed to expand and explains why the CII wants the prime minister’s office to preside above the defence ministry.

Antony is not a reformer. He has even blocked the designation of 12 big companies, including Tata, Larsen & Toubro, HCL and Mahindra, as defence “champions” capable of becoming internationally recognised defence systems integrators. He has apparently been persuaded by small and medium sized companies that they would be left out, whereas they would actually gain as suppliers to the 12. He has also bowed to defence establishment pressure and watered down offset plans that would force foreign suppliers to make up to 40% of their equipment in India. These moves have serious undermined reform initiatives started when Pranab Mukherjee, now finance minister, was in charge of defence till 2006.

So I’ll finish up with the same words that ended last week’s coal article – sadly, the chances of this government making such policy leaps are slim, as has been seen in so many other areas over the past few years. But it needs urgently to address basic issues that are devaluing its once proud army.