StratPost recently teamed up with the defense and aviation magazine Vayu to hold discussions around a round table on the future of Indian air power. These discussions held on July 04, 2014, were meant to shed light on how the fleet structure of the Indian Air Force (IAF) fighter aircraft is expected to evolve over the coming years and decades, given current circumstances.
We invited some of the top officials associated with planning and operations in the Indian Air Force and Indian Navy, some of whom have retired only recently, and who have been closely associated with the MMRCA and LCA procurement programs.
1. Admiral (retd.) Arun Prakash
2. Air Chief Marshal (retd.) SP Tyagi
3. Air Marshal (retd.) Harish Masand
4. Air Marshal (retd.) Nirdosh Tyagi
5. Vice Admiral (retd.) Shekhar Sinha
6. Air Marshal (retd) M Matheswaran
7. Air Marshal (retd.) Jimmy Bhatia
8. Air Marshal (retd.) P Barbora
9. Air Marshal (retd.) SR Deshpande
10. Maj Gen (retd.) Ashok Mehta
11. Brig (retd) Gurmeet Kanwal
12. Air Commodore (retd) Suren Tyagi
13. Col (retd.) Ajai Shukla
14. Capt (retd.) PVS Satish IN
15. Mr George Verghese
16. Mr Vinod Mishra
17. Mr Vishal Thapar
18. Mr NC Bipindra
19. Mr Nitin Gokhale
20. Mr Pushpindar Singh
The final session of the roundtable summarized the state of Indian air power and discussed ways to alleviate the difficult situation the air force could find itself in future.
Speakers included Air Chief Marshal (retd.) SP Tyagi, Air Marshal (retd.) Harish Masand, Air Marshal (retd.) Nirdosh Tyagi, Vice Admiral (retd.) Shekhar Sinha, Air Marshal (retd) M Matheswaran, Air Marshal (retd.) Jimmy Bhatia, Air Marshal (retd.) P Barbora, Brig (retd) Gurmeet Kanwal, Air Commodore (retd) Suren Tyagi, Col (retd.) Ajai Shukla, Capt (retd.) PVS Satish IN, Mr George Verghese, Mr Vinod Mishra and Mr Pushpindar Singh.
First of all, the affordability question. It’s important to recognize that the air force has consistently had that before them. That is how all the aircraft upgrade programs came into – whether it was the MiG-21 bis, or MiG-27 or 29 or the Jaguar upgrades or the Mirage upgrades. So to concentrate on the longer life of the platform and go in for upgrades of sensors and armaments. So that has been the logic.
Second point I wish to make is about the sanctity of the thirty nine and a half squadrons. This was done ages ago in a certain context – that half a squadron was a temporary authorization. I think it was in the 1965 context. Thereafter, no formal number-crunching in that intensely professional manner has taken place. The two-front war, no matter what the discussion was, is a reality which stares us in the face. You can’t tell the Chinese that it’s not in our doctrine and therefore we wouldn’t be fighting on both the fronts.
So, you have to determine that optimal mix – whether it is thirty or it goes up to fifty, depending on the force-level comparisons with both Pakistan and China – the kind of war – whether it is in Arunachal or Ladakh or Tibet – wherever. You have to do that number-crunching all over again. And you have to take on two potential adversaries together.
First step is force-level comparison with the Pakistanis. Then you have a list of valuable areas and valuable points and how many sorties you would have depending on the aircraft you have. How much armament can be carried – you’ll allow for attrition rates. So all that is a very elaborate exercise which has been done to determine your armament needs. What you might lose out from operations based on earlier experience, scaled up in the light of whatever intelligence inputs may have come to you. So it is all done quite professionally. I’m saying that now you have to do it all over again in the context of this potential two-front situation.
And whatever be that number has to be acquired. Of course you also have to factor in the fact that the composition has changed so materially from the MiG-21 era to what it is (now). I remember the chief telling me, ‘272 Sukhoi-30 – you want to take on the world?’ So that is the number we have put together for Sukhoi-30 aircraft. Similarly, now 126 MMRCA – so that apart, let the professionals – let the air force work it out. A lot of other independent inputs will also be there. But we have to go through that intense process and determine that number. Also taking into account other – the PGMs that you have, the combat UAVs may have a role – you have far more carriage capacity. So that number-crunching wouldn’t be easy, but it can be done.
So whatever be that number in whatever be the affordable time frame, you have to induct it. Resources can always be augmented. There are any number of options. Today air force accounts for 45 percent of the modernization budget of the entire Indian defense. So that is the kind of share they have come to acquire over the last ten-fifteen-twenty years. Because they went in for this kind of modernization effort, concentrating on sensors and armament and giving life extensions to platforms. So, they have gone about it quite sensibly.
Affordability, in relation to whatever is the optimal size that is determined – 30, 35, 40, 50 – that would have to be seen and how you stagger it over a period of time. And there one of the greater challenges is because the life cycle costs potentially account for four to five times the initial acquisition costs, so unless that business gets done here – looking after operations and maintenance, creating upgrade possibilities here – with all that, we still have very poor readiness levels as we discovered some time back. If it is forty-fifty percent, even if you buy two squadrons more you would be reaching where you ought to reach with what we already have. So that’s a huge area of concern.
All these upgrades have made what were single-role aircraft into multi-role aircraft with flight-refueling capability for most of them.
You need numbers as well as capability. That is well recognized. But that professional exercise to determine that optimal number has to take place. – Vinod Misra
What happens is that we’re worried about future availability of money. Now last year, the capital budget was around 70,000 crore and if we take normal inflation plus GDP growth it gives ups a figure of roughly twelve to thirteen percent. So if you just go on increasing by that amount, it’s a fairly good value. And last year it was 1.79 percent of GDP only. And our budget has fluctuated between 2.4 and 1.7 (percent) and we are at the lower end – it has actually gone down to 1.2 something in one of the years, but generally this figure is on the lower side.
If we have a marginal increase, plus utilizing the two issues which have mentioned which is budget and GDP growth, you get a fairly decent amount.
Why are some of the earlier programs in my comment about revenue and capital material is because of the exchange rate variation in the last one year. Because things had become expensive because rupee had depreciated and what you could buy from the same amount of money had reduced. And some of your expenditure remains sacrosanct. So you can’t touch that and so the balance available was less so that’s why that was a crunch.
Going forward, I feel that if air force has met most of its requirement in terms of force multipliers and some of the other assets and the number required to be inducted is now a little less, so this amount can provide you MMRCA induction plus Light Combat Aircraft induction plus many other things without any great strain on the figures.
We tend to take absolute figures without correcting them for time-related value and just arrive at a conclusion or compare horses with donkeys. You know you take the figure for absolute, basic aircraft procurement and compare it with total cost of induction. The two figures are different.
How is this 126 arrived at? 126 was in an era where DPP had not been introduced so our processes were file clearances and everything. So 126 amounted to six squadrons of replacement. And the figure continued. And some of the figures – the fifty percent offset was introduced in 2005. In 2007 when RFP was to be issued, we couldn’t change it because change process is very long.
And so was the case with the AoN figure.
And there is no bar in ministry of defense that if the AoN figure is low and the contracted figure is high then it has to be redone. No, it is not there, categorically. This is because if you fo the whole process in the stipulated time, things will be different. – Air Marshal (retd.) Nirdosh Tyagi
The interim budget that was announced by the outgoing government – the defense budget was 2,24,000 crores. And out of that around 83,000 crores was meant for capital acquisition. Soon after the new government came to power, the ministry of defense – because they have laid so much of stress in their political agendas that they will look after national security, has actually now asked for a 25 percent increase in the defense budget. If that is agreed to, it will take the budget that is going to be announced – I think ten days from now – will take it to 2,80,000 crores. And revenue budget for –let’s say this year – will not change very much. What does it mean? It means that our capital acquisition, actually, will jump by 60,000 crores, if it is agreed to.
But I don’t think that it is likely to happen. But what is a possibility is that they might increase the defense budget to 2,50,000 crores. Even with that figure it does not actually cross two percent of the GDP. In other words we will have 30,000 crores available for capital acquisition in this year alone. And that will take care of all our stalled – shall we say – new schemes that we are talking about.
Let’s look at the air force itself. We have the MMRCA, we’ve got the Chinook, we’ve got the Apache and we have not even been able to sign the C-130 additional – .So these things can become available.
As far as the country’s concerned, if we use our resources properly, two percent of the GDP, if it is used in defense, I think, is highly affordable. If we use it properly. And therefore, it will become affordable.
The other thing that I was going to talk about was the cost of the aeroplanes. But today let me say it that there is no fighter worth the – if you’re going to import it – going to cost less than about 500 to 600 crores apiece. We’re talking about 100 million dollars.
Let me also mention here that even the indigenous-produced Sukhoi-30 MKI today is costing between 450 to 500 crores apiece. So let us not get too worried about this.
Secondly, when we talk about the MMRCA and we stare at the 1,20,000 crores in front of us, it is not a one-time go. It is going to spread over a period of ten years. And we’re looking at something like 12,000 crores a year which is, once again, highly affordable. And therefore, we should not even discuss MMRCA – whether we’re going to – whether we should have it or we should not have it. I think that time has gone.
And if we start discussing or debating that issue now we’re putting ourselves back ten years.
This much money that we’re going to spend on the MMRCA – if we think ahead we should be able to use it absolutely properly. And now I’m coming to how we use the technology offset which are coming out of it.
We’re looking at fifty percent of this which is going to be spent on offsets. And this is where we need to build our technology capabilities for future aircraft that we’re going to produce indigenously.
MMRCA – when we started off it was 10.4 billion dollars. Rupee has depreciated. I did not know the dollar has also depreciated. Why is it that today in the media we’re talking about 20 billion dollars? Personally, I feel that we need to look at it very, very carefully again. Is it twenty billion dollars? 10.4 – you know rupee has depreciated from 45 to 60. But the dollar is very much there. It has not depreciated vis-à-vis the rupee very much on the world market. And therefore why is it that now we’re quoting twenty billion dollars?
If we want to use this offset that we’re talking about and technology accretion in the country to build self-sufficiency, I personally feel that the air force has to get into the driving seat. And they have to say that no we’re going to start looking after our programs ourselves. And if we can do that – and they decide as to what technology they want to import vis-à-vis the MMRCA offset, I think we’ll be working or moving in the right direction so that we can put it in the MCA or whatever aircraft is going to come in the future. – Air Marshal (retd.) Jimmy Bhatia
I think we do need to look at what is our national security policy, what is our doctrine and that’s where everything emerges from. When we talk about numbers – what numbers do we need, what a capability do we need – we need more warfighting capability for all armed forces, not just the air force and particularly for air power – will come from that doctrinal definition or, shall I say, shift if we want depending on affordability.
Babs (Barbora) also mentioned multi-role capability and therefore we may not need the same numbers, I can go to the extreme as Mr. Misra and I were discussing earlier and I said you can have one squadron of F-22s with all the capability in the world but you cannot possibly physically deploy it in ten different places. Number is still – one aircraft can’t do what ten others can do at different places at different times.
So there has to be a balance between capability and numbers. You cannot sacrifice numbers only for capability and look for multi-role capability in everything that you do.
Now some of the multi-role capability is secondary capability that we’re talking about like, for example, in the MiG-21 bis the upgrade requirement was only for air defense. Let’s be very honest. That was the original definition. We only needed air defense.
And I remember one very senior air marshal who became chief later questioned me as to why I was giving it ground attack capability. And I said, well, you need an inertial nav to feed in the radar that we’re talking about for air defense capability. And the moment you have this kind f an inertial nav, with this kind of accuracy, you’ve also got ground attack capability – all it requires is ten dollars of wiring. And then the weapons that you want, because after all, after the first ten days or fifteen days of winning air superiority, which you wish to win, what are you going to use this aircraft for? You’re going to fly it around as a flying club? Use it somewhere. And that’s how we get the secondary but pretty potent multi-role capability.
But that does not detract from the fact that we still needed those many MiG-21s. We could not cut down the numbers just because we’ve got more capability.
So based on this capability, I think, we then have to decide based on the affordability and the budgets that we’ve got – after all we’ve got to cut the cloth according to what we have in hand is high, low, medium mix that we’re talking about. Now I’m not opening up that issue of MMRCA, again. I’m not talking about it. It’s for other people to decide.
Therefore, based on the affordability issue, once you’ve defined your warfighting capability requirements you have to then work out a good mix of high, low, medium based on affordability, naturally. If I was the US and I had 675 billion dollars as my defense budget well I could afford perhaps 20 squadrons of F-22s. But I can’t afford it. So I have to move on to something which will still meet the role that I’m looking for and the capability.
We’re looking at those numbers – the moment you go from that 30 billion dollars and that 35 billion dollars that we’re spending today, to 600 billion dollars the equation is different, the choices are different. Today, even with an increase of 10, 20 percent that we expect in the defense budget which is for all three services we’ve got to figure out what the air force will get or not get and whether we can afford it over the next ten, fifteen, twenty years. Can we sustain it? – Air Marshal (retd.) Harish Masand
The US and the western countries have different requirements and their roles are different. Okay Robert Gates’ speech is very clear and illustrated very well when he cut down the F-22 numbers from 900 to 197. He’s very right. He says learnt to fight the wars that you’re fighting let’s look at what kind of wars you will fight in the future. Are the low intensity conflicts going to be more your kind of wars and interventions outside or are you going to fight a major battle? It’s right from that context.
Okay. In the Indian environment it’s different. You cannot rule out the possibility of a major two-front war however remote as it will become as we go along – you just cannot rule it out, given the environment. Therefore those numbers count and that logic – Robert Gates’ logic may not apply to us. – Air Marshal (retd) M Matheswaran
We’ve been talking about this mix of high-low and stuff like that, I had made a little wishlist in one of my writings – where I was looking at something like fifteen squadrons of Sukhoi-30s, which we’re going to get very soon, six squadrons of MMRCA, and six squadrons of FGFA, which is likely to come and I feel that after this very expensive upgrade that we’re doing on the Mirage-2000, that that would also be available in 2032. That is three squadrons there.
And I have, very foolishly, put fifteen squadrons of LCA to have a balanced force. That would have looked after the light, the medium and the heavy stuff.
So heavy was the Sukhoi-30, the MMRCA was the medium, and the LCA was light. Now the point is, again we come back to the LCA. Can we allow it to fail? If there is any possibility that LCA can be operationalized then that is the answer for us. – Air Marshal (retd.) Jimmy Bhatia
The LCA is really generic. It doesn’t have to be our LCA, only. You know what I mean? The opportunities are there. How do we go beyond this mindset? Thirty years? Done. Mk I? Done. Forty aircraft. Now, LCA Mk II – call it by any other name – do we have some ideas? Anybody got any ideas – and in affordable, large numbers?
2032. Fifteen squadrons of Sukhoi-30 MKIs, we said that hopefully there’ll be six MMRCA, six FGFA squadrons, legacy types to go – but you still have a huge gap of about 400 aircraft. LCA-type. Not LCA. So I think this is where we should be really looking at – assuming the MMRCA is done, assuming we get the FGFAs some time or the other. We still have half the air force empty.
This is what Harish was trying to get at, I think. – Pushpindar Singh
I’ll just say a few things about the costing particularly in respect of the LCA program and the MMRCA. When you talk of – on one hand we’re saying that we’re going to get all these technologies from outside. We’ve talked about 50 percent offsets and technology which will come to us.
If we have to deconstruct – we’ve also said that LCA navy has got – even if we close the program we must say that we’ve learnt X,Y,Z. There are some positives that we would draw. So let us say that we try and do an exercise of deconstruction. So we deconstruct and we say what have we learnt as positives in the LCA. What are the positives of these that we can get in terms of technology offsets or that we can learn as we absorb the MMRCA, or as we absorb the FGFA. We’re talking about all these happening in a time frame of next ten years. So you’re looking at closing one program, deconstructing, learning what you have from that, couple it with what you’re going to gain from the FGFA program or the MMRCA program.
I would say that if I had to talk about what does building an aircraft constitute of. Building an aircraft constitutes of, maybe, flight dynamics then creating the main engineering of the structures and then the engine. So if I have to even broadly deconstruct as aircraft design, airframe construction, engine building and then get into weapons and launching and delivery, with what we would get in terms of technologies from these programs plus what we already have in LCA, I think we should have, hopefully, at least addressed the airframe part of it.
Your biggest challenge is going to remain in the zone of engines. If we are to look at investing money, energy in trying to get maximum bang for the buck I would say that all our energies as a nation – and we’ve heard enough of national visions and national capital and all that – I think as a nation HAL, air force, ADA, GTRE – everybody combined – needs to focus maximum efforts in getting an engine.
Because much as we know, nobody is going to give you engine technology very easily. Even China which has been manufacturing far higher quality of materials – I’m not even going into production and our quality of production and other matters. We’ve not even produced one single engine which is really good. I think the only example we have – I’m sorry for digressing – but the best model of very high production quality that we have in our country is Bharat Forge where they’re producing the transmission shaft, I think, for Mercedes. So we can learn from examples like that, that’s a different chapter altogether but the point is that we have to deconstruct – see which are the points that we have – with marginal increase in that we can achieve our goals.
Where do we need to emphasize maximum – where do we need to put our maximum efforts across this bridge of building our own aircraft. Ultimately there is no question of air power, there is no question of power unless it is your own power. So we have to come to an understanding that you have to build your own aircraft. – Capt (retd.) PVS Satish IN
It is not enough to look at the cost of imports alone. How much does it cost us for producing it within the country? Why does it cost more? That’s one important issue we need to look at. Which means that you go into the contracts that you’ve signed – and enough number of license productions contracts you’ve signed. How much do we leverage in terms of technologies? So I can give you a figure from the 2011-12 balance sheet of the HAL – in an expenditure close to 14,000 crores, 96 percent is spent on raw materials and components imports. That much money goes outside. So what’s your value addition? Less than four percent. That means that gives you an indication as to how much have you really absorbed.
In 2007, Sukhoi-30 engine technology transfer, single crystal bay technology has been transferred to HAL. They’ve still not completely absorbed it. So that’s a huge problem. It talks about your public sector units’ skill levels and that will link you up to the policies and other issues. IF you haven’t absorbed, then it’s costing you money. Because you’re paying through your nose.
What is the point of getting technology if you don’t factor that in your contract that I will substitute your materials with my products made from my materials. Not one of them have been done, nor substituted as yet.
We have MIDHANI which is supposed to be developing aircraft materials – we don’t use any of those materials in aircraft production within the country. We import all of them. We import carbon fibers for the LCA. So the LCA is quite import-dependent, for those of you who don’t know.
So we need to look at this from a larger perspective. It’s quite a bit of a fallacy that gets projected that a lot of it is indigenous. Much of it is not indigenous and we need to recognize that fact and address that from a larger perspective. That is where the national strategy comes into the picture.
Unless you have an aerospace strategy or aeronautics strategy, which looks into how do you now get control over critical technologies, how do you develop the eco-system and then have a national policy that addresses the overall contract-signing, procurement, acquisitions and indigenous development, you will never reach where you want to reach.
And surprisingly, this proposal for National Aeronautics Commission has been on since 1969, from C Subramanium Committee. And surprisingly, the MoD has always objected to making that commission. And I believe they’re even objecting to it now, as our discussions are on. I don’t know why.
The issue is you want to carry on the way you’re managing your system now, which is largely public sector system. You need to move away from that. You need to actually wind up DDP (Department of Defense Production), you need to create a ministry of aerospace industries and you need to encourage the privatization of most of the running of the DPSUs in the corporate model.
The financial model that we follow now does not indicate the production inefficiency or production efficiency. They make profit every time, whereas actually they make losses. Huge losses.
We are not recognizing the fact that we are not getting value for the money that we spend. We are not getting control over technology. We have no control over critical technology. We are so import-dependent; we better recognize that fact and then change our policies accordingly. And that’s the major problem with our entire process. – Air Marshal (retd) M Matheswaran
In the United Kingdom system, in the MoD, the acquisition wing has got educated cost engineers who are primarily aeronautical engineers from various disciplines in aeronautics. And they do a separate three-year study of costing. When they buy or induct a system, these guys are launched into various industries and they spend nearly a year, year and a half. Each item is costed, they give what will be the profit margin, how much is the technology – now technology has got a value which Matsy’s (Matheswaran) saying. And we don’t seem to include that. But an attempt has been made in the offset which Air Marshal Bhatia mentioned, that 50 percent offset is higher than what is given in the DPP.
The reason was that we wanted more of technology to come. But nobody’s going to give you technology for the value of peanuts. So what has been done in the provision of offset is that there are multipliers.
In the sense that let us say that I want to make this coffee mug. He says sorry, I’ll only give you this part of the technology, but I will not give you the technology of the handle. Because it is something new. If it is new then you ask him ‘How much is it going to cost?’ He’ll say it’ll actually cost you so much, which is, let’s say, more than three times the cost of mug.
So you have to give him the value in the offset which is called a multiplier. And that, what Matsy was saying initially, that we want to have a team of aeronautical experts, scientists users…we have suggested that we should have a defense evaluation committee of all independent scientists and users so that they evaluate as to what should be the multiplier value for that level of technology. So if the committee feels that we can give him probably twice the cost of the whole cup, so that he can transfer all the technology right in the beginning.
So give him that value in the offset itself. Fine, I know the cost is only Rs. 10 but I will consider that you’ve done an offset of Rs. 30. That is the way to get the technology, that attempt has been made. But regrettably even the first contract where there’s offset and multiplier, has not yet materialized. So intention of the Air Force and everybody else was to make it 50% so that instead of the 30% limit which is there in the DPP, one should be able to get more technology and use it laterally subsequently into aviation industry but neither has this committee been formed nor any provision exists in the offset. The largest number of people employed in the acquisition wing of the United Kingdom MoD are the cost engineers. When they give a valuation, it includes everything and then they ask for a quote. And these are the guys who give their confidential report, then the comparison is made in the L-1 or sometimes L-2.
They are civilians, it is a mix of both and this is the largest number of manpower. They reduced this total acquisition manpower from 18,000 to 15,000 three years back but the number of cost engineers has gone up from 400 to 600, this is after cutting down all the costs. The second thing is, that you will never get the money that you require to build the capability. There is a long term integrated perspective plan which takes onboard all three services and there’s a bit of beating and churning, to see if you can find a match. So that exercise has taken a very long time but it is an approved project. Now the trouble is that this is only a capability building plan, it does not include the cost. The service headquarters are given an environment scan – as Mr. Misra said, environment scan is given by intelligence agencies, think tanks and other agencies, on what is the environment likely to be in the next fifteen years – and they are told what capability would you like to have to prevent those threats from becoming an actual war situation.
General Mehta and ACM Tyagi also said, you should be able to prevent war but that doesn’t mean that you shouldn’t have capability to fight a war. So that decision is given to be made by the experts at the service headquarters. Now once they come, it is the duty of another organization to match it and see whether the country is going to afford it or not. But the costing part is not there in the LTIPP which is a fifteen year plan.
The second issue is that it is broken into three five-year plans. This five-year plan actually takes into consideration, the costing, which includes both capital and revenue expenditure. So this is when the crunching starts but you’ll find when it is broken down into roll-on two year plan what is called the AAP, you put it to government, government is not able to commit the funds. You get to know only after the budget has been passed. So you have to go back and in a two-year period, what all do you prioritize. And that is why all these numbers go for a toss, because the government is not able to year mark the funds. And that is where everybody has been saying that you say it’ll be 2% or 2.5% of the GDP…the calculation has also been done by one organization, that if the growth rate remains 6%, 8%, 10% or 12%, what should be the budget.
A very conservative figure that DG acquisitions and our organization did, what will happen at 6% and what will happen at 8% and those figures are the bottom and top of the budgeting. However the government is not even able to give that because it come to roughly 2.5 of the GDP, and slowly getting it up to 3% when the economy does well, this is the assumption we have made. But even that assumption you are not getting 2.5%, so all this plan etc., the number crunching goes for a toss, service headquarters have a very tough time. They have already calculated what capability and every two years do a review.
And therefore what we have been suggesting is that you don’t match tank to tank, ship to ship, aircraft to aircraft. Please identify the vulnerability of China and create capability to puncture that vulnerability. But if you say that numbers have to be same then, because the technology is also improving, it is quite possible that where you required a 16 or 18 aircraft squadron or four ships of one type and ten ships of one type, maybe you can do that with lesser numbers, because technology costs more. Can you do something? But that will happen only if the government commits money, if I know what is going to be my budget for the next five years. So there is a gap between the perspective plan and the five year plan because perspective plan is only a capability build up.
We had to get this approved because otherwise there would have been a lot of financial restrictions because they would have said, sorry this country can’t afford it. But then we turned around and said, you have said that you ought to have this kind of ability to fight or dissuade…you should be able to deter or fight. There’s no mention…as somebody said that in China you have to occupy land and then you have to speak from a position of strength. That is not the government’s intention as far as I know of the documents. Government only wants dissuasive deterrence and all this capability build up is being done or planned on that basis.
So it’s not that there is no basis, there is a basis, the service headquarters are technically qualified, they are professionals to tell you that for meeting this requirement of the directive, what capability requires to be made in fifteen years.
Now whether the government gives it to you or not, that is another issue but it is an important issue. If I know that it is going to be 2% of the GDP, then I can cut my cloth right in the beginning and not plan something that is not achievable. The fault lies there, that we are not able to identify what should be the percentage of the GDP. And subsequently a time will come, as Air Marshal Tyagi was mentioning that revenue expenditure is not able to meet the allocation. I would very seriously think that once this capability building is committed, look at this allocation of capital versus revenue and reverse it, rather than 60-40, once you have got the fifteen year capability in line, then change this to make 60% in revenue and 40% in capital. Because now you have know over fifteen years, what is going to develop, or whatever you have got, the maintenance will cost more as the time passes.
So if I have to maintain let’s say 10 MMRCA or one squadron, it’s going to be much more than what you required for maintaining probably four squadrons of MiG 21 Bison because of the value of money etc., because technology costs. If you want to transfer technology in the beginning, the chap who is giving it to you, will charge you the development cost. But if you take it after five years then technology is not current, it might cost you less than what it is costing you today. But if you want it, it’ll cost you.
Therefore this multiplier thing is included in the offset but regrettably it has not seen the daylight. It’s all there, it has been factored because these things have come from service headquarters, defense finance DG acquisitions, one has worked on this for four to five years continuously to get this approved but the government can’t commit the budget. If that happens, then we can stop making wish lists and just steer at the numbers and see how much should be the revenue expenditure for lifecycle cost.
Nobody is an expert in our lifecycle costing. You go to any other country, they have costing engineers, they are engineers primarily and they have been taught costing. We have submitted this to the government a long time ago, it’s not a very big report and we could nearly get it approved but people change, there’s no continuity. – Vice Admiral (retd.) Shekhar Sinha
The capability document is approved, only difference is the finance issue…growth rate was factored as 6% but came down to 5% and that’s thrown the whole thing topsy-turvy. So prioritization changed, when prioritization changes, your entire capability sequence changes. – Air Marshal (retd) M Matheswaran
General Ashok mentioned 25 years, so I’m just relating with 25 years. In 25 years, we’ve had ten prime ministers and eleven or thirteen raksha mantris. So our concerns today standing at the point where we are so worried, are actually very genuine. But now I can assure you, what is coming now, for the next fifteen years they are going to stay. They won’t change, so I think most of these things will get sorted out. – Air Commodore (retd) Suren Tyagi
We’ve all talked of war here, but no one has talked about the duration of a future war. Duration of a future war against a nuclear umbrella or no umbrella…in this area, we’ve got Pakistan, China, us. How long do you think a war scenario will last before phenomenal pressures come on us whether we have a war with Pakistan or China or a two-front war? So I feel that the next war will be very short, very lethal and very swift. It is 24X7.
If it goes beyond ten days, someone may cross the lakshman rekha and go for the nuclear button because it is going to be devastating. Keeping that in mind, if we could review in our op instructions which are a derivation of the RM’s op directive, what would be the duration of this. Unlike what we had, intense for so much, medium for so much, and low intensity for so much, going up to 60 days, maybe we could cut down on the revenue expenditure in terms of storages of very lethal weapon systems and very costly weapon systems. – Air Marshal (retd.) P Barbora
We talked about shortages, numbers and things like that, which we said would be derived…I would like to emphasize on numbers in different kinds of assets. We keep forgetting there’s not just combat aircraft, there’s also other kinds of assets like force multipliers, weapons, we’ve to take a mix of all that. And more important, when we talk about shortages, we should look at the utilization rate. Nobody is talking about that, 44% for the Rafale you mentioned, I believe the Sukhois over here are doing about 50% or something like that. Just imagine if you were to take the utilization to 75 or 80% from there, the numbers that you are talking about immediately…at least for the short term till we can fill up the gaps, this can happen.
And one more aspect, I always say, is the attrition rate. Why are we content with 1% and 2% losses, accident rates – look at the numbers and the costs that we save over there. So we can work on that too. One other issue, just want to make a comment on offsets, having dealt with offsets for so long. I haven’t seen today, though the offsets have been in for more than ten years or more with the DPP, I haven’t seen one single effective offset. They are all frauds for money laundering, I’m sorry to say that, so far.
And last, General Mehta’s point, vulnerability and puncture, it’s a different form of clouds with center of gravity, that’s what we are talking about. All this time everyone’s talking about hit the guy where it hurts the most. You can put it in different terms but that’s what you want, that’s the kind of capability that you are looking for. – Air Marshal (retd.) Harish Masand
At the end of it, if we talk about air power or aerospace capability within the country then you have to look at it creating the capability within the country. So if that is not there, if your strategies actually don’t look at creating that capability within the country, it’ll always be expensive, That is one issue.
The second part is with respect to offsets. I was a member of the first offset committee and we fought like hell to create a holistic offset policy. Somehow we got into the mindset that we are stepping into the offsets for the first time, let’s not look at it in a big way, let’s only look at the direct offsets. Now that reflects two different important mindsets.
One, you haven’t appreciated what your weakness is and here is an opportunity, how do I devise a policy to address the weaknesses. So you are refusing to do that.
Second, it reflects a fair amount ignorance on the part of people who are taking policies with respect to the technological capabilities and certain areas which need to be plugged. This is why I say the larger level strategy needs to be crafted very well. If we had done that offset policy well in holistic, then it will have two component, direct and indirect offsets. The multiplication factor etc that he (Vice Admiral Shekhar Sinha) explained is the one that comes into the domain of indirect offsets. The direct offsets, the 30% of what we have done is literally a buy back. We had come to trade earlier, this would have been another way of nesting within the country, joint ventures, tell them to buy back in any contract.
But the indirect offset is the one that will address your capability shortfalls in terms of technology capabilities and in terms of skill levels, in terms of education, in terms of infrastructure. And combination of the two offsets could have gone on to 200%, 190%…examples are there. But we refused to bite the bullet and now we are going fifteen years later in gradual increments and that is not being done well. 50% increment, direct offset, we moved the case, Shekhar Dutt was the defense secretary.
They accepted considering the shortfalls, that is what we explained. But again, memory is short, we don’t appreciate what are the shortfalls, where we need to bring in these technologies and tie them down to give us the technology and leverage the contracts, leveraging our purchases. We’ve become huge importers, that’s not a thing to be proud of. But at least when you spend that kind of money in imports, how about leveraging that. If you don’t leverage, air power will always be very expensive. – Air Marshal (retd) M Matheswaran
Starting with offsets, there are two comments. One is, multiplier is only permitted for transfer of technology to DRDO. So DRDO instead of developing technology is now a recipient of technology. There is no multiplier for transfer of technology elsewhere. There was a comment that RFP was modified to include heavier type. The RFP was never modified, RFI was net again but RFI and RFP are different things. RFP was in the form in which it was earlier and it was only modified for technical changes. And when a heavier type comes, you don’t have to modify the RFP because RFP is based on the lowest and to include competition.
So it doesn’t have to increase when somebody heavier comes. It was a competitive process and a proper process. I’d just liked to assure that. The third issue is what should be the force mix. You know in the end there should be takeaway. We should now concentrate on 400 light aircraft and LCA as far as indications today are, is a non-starter. We would like to somehow make it work but unless we can find that method, there should be some parallel program to make good this deficiency. And last issue is budgetary concerns. Minor tweaking is required and this money is adequate to meet all our requirements that are projected. – Air Marshal (retd.) Nirdosh Tyagi
I think we’ve spoken a lot about these offsets stuff like that. I just want to bring to the notice of the house one particular revelation where we’re talking about the MMRCA, it is still being discussed or actually taken forward based on what was there in 2006 DPP. And technology transfer is not part of it unfortunately. I only hope that the government actually brings it in line with what is there today and technology transfer in the true sense of it, no menu laundering please but actually honestly it is done and we create those capabilities within the country.
Second thing I want to say is that I don’t know whether we can take it up, 2% of the GDP perhaps we can say, if the new government which is thinking out of the box, can say let us share the poverty and the prosperity of the country vis-a-vis the services so that at least we know how to plan our future.
One more thing I want to say, this NDA government, in their previous term, they had created a hedge fund, the money that was not spent during the financial year was parked into this hedge fund. They’d created this for the defense only where you could park up to 25,000 crores. I think we need to rejuvenate that. ¬- Air Marshal (retd.) Jimmy Bhatia
On this issue of a modernization fund which doesn’t lapse on the midnight hour of 31st March, we pointed out to Pranab Mukherjee when he was Defense Minister, when his Finance Minister did not see it through. Jaswant Singh in the interim budget had put down a fund of 25,000 crores, so we told Pranab Mukherjee when he came to the ORF at that time and we said, ‘Sir, in British times, in the same Indian parliament this was allowed we haven’t changed the rules, have we?’ So he promised to go back and check up. – Brig (retd) Gurmeet Kanwal
I don’t have the last word but the least word. I think it was mentioned and I would agree with what ACM Tyagi said, we don’t have a national security doctrine, it’s very fuzzy and it’s not shared. I don’t know the last time when parliament discussed defense, maybe twenty years ago. It simply doesn’t happen, it needs to be there.
And I don’t know how well or how effectively the National Security Council functions. It is an ad hoc emergency body. So there’s no larger thinking there within which defense policy, production etc have to be framed.
Second is, we’ve talked about all the procurements we are making, and acquisitions, those are very important but I would emphasize the need for indigenous production including the private sector, which is being allowed now but grudgingly. Why not 100%, we say it’s a secret, but when you import things from outside, it’s 100% given away. The secret is kept from us.
There’s an old saying, we are fearful doing this because we don’t have the experience, bad judgment will cost us the earth but good judgment comes from experience and experience comes from bad judgment. And having contracted the rest of the world to build for us, they have learnt through bad judgment on Indian contract, the experience which has given them the expertise which we go back to.
I think the world and many of our major suppliers have learnt at India’s expense and have made mistakes and mid course corrections which we have paid for. We are not prepared to do that ourselves, so I think that is to my mind a very important factor.
Our scientists, and technologists are wonderful persons and there are many serving abroad who’d be willing to come back for worthwhile intellectual activity, research development and so on here. Reverse engineering is something the Chinese have grown within and which we can do.
So I think we need to emphasize indigenous production including private production and this would then figure, the kind of research and development effort which can be drawn from all over the world, so that we don’t have to go outside and the world doesn’t learn at our cost and gains experience but we develop our own expertise. And with joint production of some of these things, which other countries might partner us with, for example, Brahmos, we collaborate on programs with certain countries, Israel, Japan, whosoever, who is willing to partner with us with the necessary expertise and the same needs broadly speaking in terms of the defense doctrine, the worldview and so on. – George Verghese
The duration of this session is 01 hour, 03 minutes, 40 seconds.
Producer: Shruti Pushkarna, StratPost