Need for a Defence Procurement Regulator

What is the issue?

A Parliamentary standing committee report has highlighted contradiction between actual defence procurements and budget estimates.
To resolve such claims union Budget 2018 is expected to announce a regulatory body for defence procurement.

How are defence procurements made in India?

Defence spending is classified under Non-plan expenditure.
The respective funds will be allocated by the finance ministry through budget estimates.
Allocated funds will be utilized by

Defence procurements are typically conducted through a competitive two stage bidding process.
It happens as per the guidelines contained in the Defence Procurement Procedure of India (DPP).
Apart from this, defence procurement can also be made through inter-governmental agreements between friendly countries.

What are the concerns?

The report highlights inadequate budget allocations made by the Ministry of Finance (MoF).
There are perpetual delays in capital acquisitions.
Also, there is constant miscommunication between the Ministry of Defence (MoD) and the Ministry of Finance (MoF).
Persistent failure of the defence ministry to utilise the allocated funds has also contributed to reduction in budget allocations.
Armed forces are sadly under-equipped and procurement planning is grossly inadequate.
It is concluded that India is not combat ready.

How could a regulator help?

The shortfalls can be resolved better by an independent regulator for defence acquisitions.
Implementation of the procurement policy can better be overseen.
The regulator could check whether the policies are in line with the current and future requirements of the armed forces.
A regulator could ensure proper acquisition decisions by MoD, MoF, armed forces and Cabinet Committee on Security.

Source: Business Standard