On a recent visit to some think tanks in Berlin and Brussels, whenever the Prime Minister’s ‘Make in India’ programme was discussed, the response from our hosts invariably focused on policy issues. The major concern expressed related to assurances that the terms and conditions for investing in ventures in the defense field will neither be revoked nor subsequently rejigged to the detriment of the investing party, once the project takes off. The Vodafone case was oft quoted. This related to introduction of GAAR (General Anti Avoidance Rules) in the 2012-13 budget by the then Finance Minister Dr. Pranab Mukherjee and the controversial retrospective changes in the tax law. Vodafone, a UK-based telecom major, one of the affected parties, took the case to court. Under the new rules, amendments were to take place retrospectively from April 1, 1962, which meant that many closed tax cases could theoretically be re-considered, including that of Vodafone’s. Such retrospective legislation vitiates the investment climate.

Within the country, a major concern is that of accountability. India’s Defence Public Sector has never been held accountable for shoddy production of arms and ammunition. A case in point is the horrific accident that took place in Central Ammunition Depot (CAD), Pulgaon, near Nagpur on 31 May 2016. 19 bravehearts lost their lives and 17 were seriously injured. Here, defective anti-tank mines made by our ordnance factories was stored in a segregated shed. The defective mines, received in the depot in 2010 caught fire which led to the explosion. No action seems to have been taken on those responsible for manufacturing the defective ammunition nor against those officials in the OFB who gave the defective ammunition a certificate of fitness before it left the factory. The Secretary Defence Production has not been held accountable for gross negligence and failure to discharge his responsibility as the OFB refused to give orders for the destruction of the ammunition, despite being warned by the DGOS in 2013 itself that such failure could lead to disastrous consequences. The same story is repeated time and again, where sloth and inefficiency is invariably overlooked. Which is why we now even have to import rifles to equip the Army.

The processes followed for Defence Acquisitions have been somewhat simplified, but they are still too rigid. Greater participation by the private sector is the need of the hour and government rules must make for an even playing field. It is only through the private sector that India can build a strong defence industrial base, without which the Make in India programme will remain nothing but a slogan. The road ahead is long and bumpy and only a steely will and outstanding leadership can achieve what the Prime Minister has set out to do. Can the MoD deliver? The jury is still out on that one.

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