The Curse Of The Light Purse: What Will Budget '21 Bring For India's Defence?

In the March 2001 edition of the Harvard Business Review, Paul Levy describes the management lessons learnt from the operations of a sewage treatment plant at Nut Island close to Boston, US, where a very dedicated and professional team was involved with running it across thirty years. 바카라�They were every manager바카라�s dream team. They performed difficult, dirty, dangerous work without complaint, they put in thousands of hours of unpaid overtime, and they even dipped into their own pockets to buy spare parts.... (And) yet, in one six-month period in 1982, in the ordinary course of business, they released 3.7 billion gallons of raw sewage into the harbour. Other routine procedures they performed to keep the harbour clean, such as dumping massive amounts of chlorine into otherwise untreated sewage, actually worsened the harbour바카라�s already dreadful water quality바카라�.

Mind you, this was not insubordination or deliberate sabotage. You could be pardoned for imagining an otherwise stellar team lapsing into a fit of rebelliousness after being kept in sustained frustration. But no. As they recorded the story, the team stuck to its best practices. This came out of an operation being long kept bereft of the resources it legitimately required. The team was forced, by endemic management indifference, to look inward for solutions바카라�from within their own limited resources. As Levy wrote, they even spent their own money to keep the job running as smoothly as possible. But where a total reappraisal of resource needs was called for, this could deliver only ad-hocism. And that meant things eventually spiralling out of control, into a full-blown crisis.

The budget constraints in the armed forces give us a perfect analogue바카라�only, on a much larger scale. It바카라�s a harsh reality that, despite regular debates and calls of desperation, no tangible changes are seen in the overall allocations to defence. Pundits have been warning for years that less than 3 per cent of GDP towards defence cannot boost our preparedness to meet external threats바카라�and anyone who reads the news knows these have been on the rise of late.

But the only thing we hear of is a perpetual state of penury. And, consequently, the slew of measures through which the forces themselves are forced to exercise thrift, sometimes in a reactive way.

The 바카라�Demands For Grants Analysis 20-21바카라� reflects the general decline of defence expenditure as a percentage of GDP over the last 10 years. And there바카라�s also a troubling skew within that. Pay & allowances and pension components increasingly form a larger part of the expenditure pie, leaching away vital funds from capital needs. The army has seen its capital expenditure share drop from 바카라�26 per cent in 2007-08 to 18 per cent in 2020-21바카라�. Pay & allowances 바카라�account for 70 per cent of its total revenue expenditure and 57 per cent of the total 바카라�.

Seen against the dire need for modernisation, this inequitable ratio between capital and revenue comes as a pincer squeeze. India faces an unpredictable dynamic on its borders, and we as a nation may have occasion to rue this conjuncture if we need to fall back on those brave words바카라�바카라�We shall fight with whatever we have바카라�바카라�that an army chief had mouthed two decades ago.

The counter-argument that defence cannot remain insulated from the other critical concerns a nation is faced with바카라�and therefore has to accept resource constraints바카라�only plunges us into endless iterations of the unenlightening 바카라�butter versus gun바카라� debate.... Goebbels and the truth aren바카라�t easy cohabitants but we could surely take his gnomic truism바카라�바카라�One cannot shoot with butter바카라�바카라�at face value.

Still, the larger question looms: what does the Indian government do? There are multiple enemies at our door, and little bread in the house바카라�forget butter.

In the corporate world, a CFO may trim travel down to economy class in a tight year. But then, to quote Churchill from 1904, 바카라�The army is not like a limited liability company, to be reconstructed, remodelled, liquidated and refloated from week to week as the money market fluctuates...바카라� The counter-view to that came from Haldane, Britain바카라�s Secretary of State for War, a year or so later: 바카라�If money is tight and the cost of a modern army enormous...why spend so much on pretty uniforms and no less than £15 million on bands?바카라� (The RUSI Journal, Volume 125, 1980 - Issue 2). Those issues seem perennial! See how that syncs with the recent internal review of existing practices by the Indian army바카라�and its acceptance for the need in reduction in ceremonials바카라�in a stated drive towards 바카라�Optimisation of Manpower and 바카라�.

The Pension Conundrum

Now juxtapose this with the new recommendations on pensions that are floating around...and see a pattern forming all around.

Yes, the situation is dire. If together with pay & allowances, pensions constitute 61 per cent of the MoD's total 2020-21 Budget, surely you can바카라�t overstate the severity of the problem. But would that warrant the controversial solution in the air: increasing the retirement age?

No, says an anguished chorus from serving and retired officers. As early as February 2020, Lt Gen Prakash Menon (Retd) had warned against such a 바카라�solution바카라�, saying the Chief of Defence Staff바카라�s proposal 바카라�could debilitate the effectiveness of India바카라�s military instrument...바카라�. The armed forces are 바카라�fundamentally shaped for combat, where age plays a significant role in conditions characterised by danger to life and limb, fear, uncertainty and unimaginable physical and mental stress,바카라� he .

Various officers highlighted the extreme short-sightedness and potentially counter-productive nature of this proposal바카라�the collective naysaying included a hard-hitting article by serving officers in Mission Victory India . A leaked, undated 바카라�briefing note바카라� from naval headquarters added to the combustible mix.

Take the other proposal. What happens if you offer only varying fractions of the stipulated pension if an officer seeks premature retirement at any stage after age 41? Remember, that바카라�s an age when no other career prospects remain바카라�. Yes, you guessed right, even those who had planned to retire and leave will naturally stay back.

Add up the negatives: you are willy-nilly proposing to increase the pool of ageing, demotivated management layer in a vital force. And, by doing so, you will also end up paying full salaries for the next 15 years! (And the full pension afterwards anyway.) This quick-fix clearly rests on a grievous calculation flaw바카라�and while seemingly addressing a symptom, it could actually exacerbate the underlying disease.

It would therefore be in the interest of the nation in general and the forces in particular that the military brass reflects on the views expressed in a number of articles written by former senior officers, sharing similar concerns, before formalising the way ahead.

Procrastination is not an option any more. The pension bill is by now directly affecting defence modernisation. L.K. Behera and Vinay Kaushal, researchers at MP-IDSA, observe that 바카라�바카라�the fast rise in pension expenditure has a significant crowding-out effect on stores and modernisation, two major components that determine the nation바카라�s war-fighting ability바카라�.

Judge first by the abstract figures. The 2020-21 Budget estimates peg the individual outlays thus바카라�Stores: 6%; Capital Procurement: 19%; Pensions: 28%; . 

To get a deeper insight, now see that in flesh and blood, brick and mortar. What the asphyxiating budget squeeze actually wreaks, with a real-life case study.

Air Marshal M. Matheswaran (retd) named the problem in a scathing article in Jan 2019 thus: 바카라�In October 2017, the Chief of the Army Staff indicated the scrapping of a major modernisation programme, the Battlefield Management System (BMS)바카라�.바카라�

The article went on to elaborate how 바카라�precarious바카라� the position was in respect of our army바카라�s equipment and weapons, placing the scrapping of the BMS in a wider context: 바카라�68 per cent of equipment is vintage, only 24 per cent is of current technology, and eight per cent is fit to be displayed as museum pieces. So much for the Indian army바카라�s combat capability; the air force and navy would fare no 바카라�.

So what exactly was this BMS project that was shelved? It was a genuine, ambitious 바카라�Make in India바카라� initiative바카라�exactly the sort of thing we now crave. And its cradle-to-grave story, unfolding over 10-12 years, takes us to the heart of the military modernisation imbroglio.

Born in the Desert

Here바카라�s the backstory. Over three decades ago, the US military had begun visualising the need for integrating IT advancements into the battlefield canvas. A thesis published in March 1987바카라�two years before Tim Berners-Lee invented the World Wide Web!바카라�shows how the think-tanks there were ahead of the curve. It was clear to them that survivability in modern-day warfare demanded 바카라�command, control and communications (C3)바카라� actuated on computer networks. C3, they rightly prophesied, was 바카라�reshaping our whole society in ways which will inevitably extend to the battlefield바카라�. The concept of BMS thus was to 바카라�provide the integrating tool바카라� for an automated framework of operations that would change .

Shades of this were seen in action in the Persian Gulf War of 1991. K.C. Clark, a professor of analytical cartography, in a paper titled Maps and Mapping Technologies of the Persian Gulf War, has written how the US navy put to test 바카라�the Joint Operations Tactical System바카라�: a complete BMS 바카라�capable of data fusion, control and display (that) makes use of large-format displays, workstations, plotters and other .

Remember, at that time, Linux is still in the prenatal ward, the Intel 486 SX Processor is just out, Windows for Workgroups is two years away.

Yes, there were glitches바카라�including with a nascent GPS that had to operate with far fewer satellites than was needed for 바카라�to-the-centimetre precision바카라�.

For a fully dependable GPS, they needed 24 satellites. Larry Greenemeier described the problem thus in Scientific American: 바카라�바카라�the US air force바카라�s Navstar (Navigation System Using Timing and Ranging) constellation included only 16 satellites and six of those were older research and development units repurposed to help with the war effort바카라�the satellites in the original Navstar constellation could align long enough to provide about 19 hours each day. Accuracy would be within 16 meters바카라�.바카라�. So much for 바카라�to-the-centimetre 바카라�. 

By the time the Iraq war of 2003 was underway, there was a paradigm shift in the tech layer. However, issues continued to dog the US forces. While Pentagon was all praise for the networking successes, a think-tank involved in the compilation of the Iraq Campaign report stated that 바카라�one key node fell off the US intelligence network: the frontline troops바카라�! An extract from Technology Review of November 2004 gives us a glimpse of the chaos: 바카라�바카라�connectivity in Qatar was matched by a data dearth in the Iraqi desert. Some units outran the range of high-bandwidth communications relays. Downloads took hours. Software locked up. And the enemy was sometimes difficult to see in the first place...The [First Marine] Division found the enemy by running into them, much as forces have done since the beginning of warfare.바카라� A retired officer said gloomily, 바카라�That바카라�s the way it was done in .바카라� 

But did these snafus dissuade them from further research? No, they didn바카라�t turn the clock back...it is the privilege of pioneers to falter, to have missteps, and yet only to be goaded further. The 바카라�Command Post of the Future바카라�, for instance, was a DARPA project that took a 바카라�comprehensive view of war in a collaborative environment바카라�바카라� and eventually digitised most associated functions, including video conferencing, consequently reducing 바카라�the demand for 바카라�. 

The episode has vital lessons for everyone. One is how IT advancements in the corporate sector could be leveraged by the military. Two, how an aware, well-funded military can be ahead not only of other militaries but even of the whole technology sector out there. How its internal urgencies can put it in the frontline of innovation for the whole world.

This capacity comes about with some bold thinking바카라�the sign of enlightened, open-minded leadership. Look at the conceptual route-mapping undertaken by Network-Centric Warfare: Its Origin and Future,a paper co-authored by a vice-admiral and a former air force officer in the January 1998 issue of naval journal . In the words of Noah Shachtman of Wired, that paper 바카라�not only named the philosophy but laid out a new direction for how the US would think about 바카라�.

To start with, that 1998 paper looked not merely, or exclusively, at military but at the changes, successful businesses brought about by leveraging technology and actually cited three key takeaways from Wal-Mart!

What were these takeaways? Zeroing in on Wal-Mart바카라�s successes in network-centric retailing, the paper lists the ideas the military could learn from, adapt and implement. In brief:

• Shift from platform to network to enable 바카라�flexible바카라� and 바카라�dynamic바카라� network-centric operations. Decision: Assign top priority to construction of high-quality networks.
• Viewing partners as 바카라�part of a continuously adapting ecosystem바카라� to increase speed & profitability in sales & production. Decision: Develop high-speed sensor grids & automate command-and-control systems coupled with transaction grids.
• To ensure market dominance, make strategic choices appropriate to changing ecosystems. Decision/inference: Pursuing operational effectiveness and adhering to an obsolete strategy is a formula for failure.

This ability to assess an environment in its entirety, even drawing from outside the military context바카라�and the willingness to apply cross-industry learnings innovatively바카라�is surely what a nation like India, which proclaims itself to be a global IT leader, could use. In times of a dire resource cul de sac, it may be profitable to forage in new ways바카라�and to think it possible that heterogeneous verticals can be a 바카라�fertile source of ideas바카라�, that the underlying architecture of an organisation can be changed ground up. In short, we can (and must) do much better than put sellotape on broken furniture.

Sure enough, back in the noughties, the whole world benefited from the American military바카라�s advances. For, most modern armies were soon following in their footsteps. The preparatory work for India바카라�s own BMS started in the early 2000s. Lt Gen P.C. Katoch (retd), who has written extensively on the subject, states: 바카라�Post establishment of the Directorate General of Information System (DGIS) in 2004, the army바카라�s Tactical Command, Control, Communications and Information (Tac C³I) system was taken up, of which the BMS was one component바카라�.바카라�

Its main purpose was to integrate resources, 바카라�bringing them to the right place, at the right time, with right lethality to provide (a) real-time, appropriate, common (and) comprehensive tactical picture; to link the soldier to the battalion/combat group commander level for situational awareness and decision 바카라�⿒�.

But as we contemplate the restive borderscapes of 2021, just months after a series of disquieting news from the LoC and various points along the LAC where we encounter a revanchist China, we can also look back at a system that could have provided a critical edge바카라�and was sacrificed in a fit of misguided thrift.

The overall conclusion from Gen Katoch바카라�s words over half a decade (2012-18)바카라�that BMS continues to be an operational necessity바카라�was often deemed overstated. But he continuously expressed dismay at its foreclosure and rebuffed views that questioned BMS바카라�s criticality. It is irony itself that proof of his prescience was thrust right in our faces in 2020, during the skirmishes with China.

As it turned out, as the faceoff with China began, there was a little option available with the three services but to resort to emergency procurement: 바카라�all three services are believed to have already executed emergency purchases of over $2 billion since June 2020 to plug enduring equipment and ammunition shortages, adversely upsetting바카라�⿒�.

Unmake in India?

But the key concern that emerged in Gen Katoch바카라�s writing was the 바카라�management바카라� of an important Make in India initiative. A short extract of the salient activities with key targets and dates should offer a perspective here. Approach paper approved in the early 2000s, project okayed in 2007, fielding into the army expected during 2013-17. However, the actual approval by the Defence Acquisition Council happened only in end-2011.

That inevitably led to the mapped-out milestones toppling again and again like ninepins. The Expression of Interest was now to be issued in Aug-Sep 2013; this instead got delayed to February 2015. Two 바카라�Developing Agencies바카라� were to be shortlisted by March 2014 and commencement of design was expected to start in July 2014바카라�though it was only in February 2016 that the MoD gave its green signal to the two consortia to develop a prototype.

By this time, the calendar had gone all awry. Phase 2 from the initial plan바카라�2017바카라�went to 2021. And Phase 3 from 2022 to 2026. The fruitless look of things became prophetic: the project was officially shut down in July 2018.

The undesirable lead times between the various activities can be assessed by looking at the trajectory of the project progress. Yes, any committed study, design or implementation team바카라�irrespective of the organisation they belong to, public or private바카라�can turn sceptical and bitter.

What would have disappointed the many professionals committed to this project as it meandered off into oblivion? It바카라�s the very close parallels in the 바카라�tech layer바카라� between the requirements in BMS and the skill availability in the IT companies. That would have goaded them into pushing their capability limits, just to be a part of something new and creative.

Whether it was comparing the principles on which BMS works to Google Maps, or connecting the multiple BMS entities and devices onto a single IoT network, there바카라�s little doubt that what got shortchanged was not just the army losing out on a critical requirement, but the industry itself missing out.

The loss of this part-collaborative, part-competitive and always mutually enriching interface between the military and the IT industry outside is what a piece by Ajay Shukla touched on, quoting a corporate executive: 바카라�BMS would galvanise IoT knowhow in India. This would be a classic case of technology 바카라�trickledown바카라� from defence to civilian applications바카라�.

In Shukla바카라�s interactions with tech-savvy junior army officers, he realised they have a cynical view of 바카라�a 21st-century command and control network that controls an old-style combat force바카라�. The statement from an officer who was part of the BMS team sums up their deep disappointment: 바카라�Every military worth its salt will be networked in a decade or two. We will have no choice but to be networked too. Foreclosing BMS today will only mean that, instead of Indian companies, it will be the Israelis or the Americans who network .바카라� 

The fact that the Indian private sector lost an opportunity to develop, innovate and improve a niche ecosystem is sad indeed. With machine learning, AI and IoT initiatives stretching innovation levels across enterprises, a military vertical offering a golden chance for Indian industry to explore new horizons, improve and, if possible, lead바카라�it바카라�s this that was stymied. One thing is certain: dispirited teams in the forces and a discouraged industry are not the best recipe to turn 바카라�Make in India바카라� to 바카라�Made in India바카라�.

That apart, the cradle-to-grave story of BMS also brings to light gaps in the management and decision-making ability of the entities involved. When unchartered technological domains are explored, there are bound to be setbacks바카라�as the US example shows. A certain level of fuzziness would exist, despite all the study and design preparation. As a result, budget estimates can go awry. But an estimate would have been made in 2007바카라�and that should have accounted for this fuzziness affecting overall costs by the time Phase 3 came to an end in 2022 as per the original plan. But the planners panicked in 2017, ten years after kickoff! That바카라�s when they realised 바카라�equipping the army's 800-plus combat units with BMS would cost an unaffordable Rs 500 billion to Rs 600 billion, going by prototype development costs바카라� (quoting Shukla). This is not the way of wisdom.

It바카라�s also around this time that other HR schemes had begun to take effect, as Behra and Kaushal pointed out. OROP and the Seventh Pay Commission had 바카라�led to an increase of 46 per cent in pension expenditure in just one year바카라�. Since financial pictures do converge at the top, it바카라�s difficult to believe the left hand was not aware of what the right was up to when critical decisions were being made. There was no alternative but to have additional allocations made for each of these streams: they represented different needs of a fighting force and shutting the sluice-gates on either would prove detrimental.

It may be wise to turn to Gen Katoch바카라�s words바카라�since comments from a senior officer such as him surely could not have been based on a single experience, and cannot have come without an alternative vision. He has been extremely critical not only of 바카라�over-reliance on (the) governmental defence-industrial complex바카라�, or of how 바카라�annual defence allocations are slashed by the Finance Ministry arbitrarily바카라�. Those remarks could have been made by any sectoral partisan. It바카라�s when he talks of how 바카라�India바카라�s investments in R&D (are) abysmal바카라�, how it has even 바카라�failed to establish a separate R&D fund바카라�, or to create an 바카라�environment for private sector investing in defence R&D바카라� that he offers a way out.

The military leadership needs to really think hard before they embark on any other initiative of this scale. The onus of delivering security바카라�with or without modernisation바카라�continues to be vested with them. But the authority that controls the purse-strings, and decides whether modernisation will take effect, lies with someone else. Is it better, therefore, for the military to cease looking at such monolithic projects바카라�OR is it better, while it continues to visualise the larger solution landscape, to leverage the financial powers it has, however limited, to build incrementally, build small, and stagger deployment? This may be impractical for mega modernisation projects, but if we take a cue from evolving technology development methodologies and startup ecosystems, there바카라�s every reason for the armed forces to steer differently. Else, with prolonged gestation periods against a dynamically changing technology environment, projects will continue to remain on the drawing board바카라�or get jettisoned.

In the merchant and rug parable, jumping on a large bump in the centre of the rug to flatten it only resulted in more bumps. Ignoring the increase in pension burden for years now바카라�despite several committee reports바카라�has begun to seriously bleed modernisation initiatives. Stalling decisions on vital military imperatives is not an option EITHER. Reducing the pension burden by increasing the retirement age is akin to jumping on the bump and would only result in destabilising the equilibrium of a fighting force. It바카라�s time to lift the rug, address the slithering snake that lies underneath and neutralise it without delay.

At the same time, if the management layer represented by the civil establishment keeps an arm바카라�s length and expects the military brass to manage with what it has, the undesirable Nut Island Effect may kick in. Only, in this case, the stink won바카라�t be within a small neighbourhood.

(This is a substantially expanded and updated version of an article published in Outlook in December 2020.)

(The author is a former Indian Naval Officer whose key assignments in the Navy included, Joint Director of Personnel (Information Systems) and Logistic Officer INS Delhi. He has also held different positions in the Integrated Logistics Management System Centres. Views expressed are personal and do not necessarily reflect those of Outlook Magazine.)