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Take a middle path

india Updated: Jan 31, 2008 22:55 IST

The Defence Ministry is rightly concerned about its procurement deals being slowed down by controversies surrounding kickbacks. So much so that it has now called for a debate on ‘registering’ agents to ‘promote transparency and smoothen the equipment acquisition process in a legitimate manner’. Union Minister of State for Defence Rao Inderjit Singh floated this idea recently as a vaccine to prevent scandals in defence deals. Several defence contracts are stuck in the pipeline because of these jitters — often exaggerated — leaving the Rs 21,000 crore earmarked for the modernisation of the forces over the last five years unspent.

The pity is that it is not easy to push such stalled contracts even if the government wants to, as returned funds lapse from the defence budget at the end of every financial year. In other words, fresh proposals are required to revive them. No wonder the mega contracts for 400 155-mm towed artillery guns and 197 light helicopters for the army — worth around
Rs 4,000 crore each — were scrapped after years of hanging fire. The army has not shopped for heavy weaponry since 1986 when it bought 400-odd artillery guns from Bofors. It sparked allegations that politicians took bribes to clinch the deal and the scandal hastened the collapse of the Rajiv Gandhi government in 1989, leading to a permanent ban on middlemen in defence deals.

It is unfortunate that although India is one of the largest importers of military hardware and software in the world, there are no legalised defence agents in the country. No wonder this allows middlemen to flourish every time the MoD decides to go shopping. The travesty is all the more since all the other ministries welcome middlemen — or, well, ‘agents’ — and give them legal commissions. It is common practice the world over for agents to play a facilitating role in defence acquisitions. In fact, authorised defence agents would only encourage transparency and professional interaction with the services, which helps keep political touts at arm’s length. A debate on this issue is long overdue and welcome.