Gen. (Retd.) Shankar Roychowdhury
The Arjun tank is a symbol of indigenisation of our defence equipment. Our defence budget is currently touching 83,000 crore rupees. Next year, it will probably increase by 10 per cent and it will keep increasing in the years to come. With such vast amounts of money pouring into the defence budget, there is a requirement that the maximum portion of this money should be spent within the country. Although about 70-80 per cent of the budget (mostly on the revenue side) is spent within the country, it is time that a large portion of the capital budget is also spent within the country. The aim of this discussion is to talk about the efforts that are being made to indigenise defence equipment so that the Indian armed forces spend Indian money to buy buy Indian equipment. There are various attitudes within the armed forces, the government, the Defence Research and Development Organisation (DRDO), and the defence production agencies. Some of the questions that need to be discussed are: How good is our indigenous equipment? What is the quality control standards? How good is our R&D? Can we ever achieve a target of spending 85 per cent of the capital expenditure of the defence budget on indigenous equipment? Since each service has its own experiences, it is relevant to get people who could present the views about the three services. We have for the Air Force, Wg. Cdr Praful Bakshi; for the Navy, Commander Khan; for the Army, Lt. Gen. (retd.) Niranjan S. Malik; and for the DRDO, Dr. Santhanam.

"The Indian Army and the Arjun Experiment" - Lt. Gen. (Retd.) Niranjan S. Malik

During WW II India was a base for repair, overhaul and other major military works for the entire south east Asian operations as well as the China and Indian Ocean operations. Considerable amount of industraliasation had perforce taken place. It was but natural that from there we should have taken off and built up our indigenous defence industry. This somehow did not happen. The approach was to acquire equipment from abroad if it was cheaper. This was the background of the Indian defence industry and it has continued despite the fact that we have built up a colossal organisation of defence research. Despite our attempts  to be self reliant on various issues there are a number of problems. The MBT Arjun project offers several lessons.

First and foremost, the problem comes between the user and the DRDO. The problem basically is the GSQR. The GSQR never gets finalised. Changing GSQRs slow down the whole process and the datelines are not kept and expenditure keeps going up. That has been one of the major reasons for the delay in the Arjun tank. At the same time, if you look at the user's perspective, if we don't keep up with the latest technology, then we will get an equipment which is likely to be outdated by the time production starts. This is a problem area which needs to be resolved. The other area is coordination which is becoming a major problem between the user, the DRDO and the manufacturing agency, which is going to produce the equipment. In the case of MBT Arjun, it is the Heavy Vehicles Factory (HVF) at Avadi which is responsible for the delay. HVF takes it as a second baby and not as its main job. The HVF is working on the T-90s, T-72 overhaul and also on the Arjun. It is doubtful whether it will be able to make 120 Arjuns within the given time period. Although the first 15 tanks were supposedfly 'Made in HVF Avadi', they were really put together by workers and engineers who had come from the CVRD.

The procedures for indigenisation are very tedious. The problems are of two kinds. The first is the non-availablity of expertise and technical knowledge within the country. For example, the tracks for the Arjuns were being imported and I wanted this to be made within the country. I was told that it could be made in Ludhiana. We paid an advance and gave the agency our requirments for the track. After two years, that agency said that it could not make the tracks as per our requirements. We had been to every factory, including BHEL in Ranchi which had no other work at that time, but no one could do the job.

The other type of problem is that private firms that really can do import substitution are not rewarded. This was clear in the case of rubberising the road wheels. To rubberise the Arjun, the tanks used to be ferried across to Germany by air, rubberised there and the brought back. This was colosally expensive. We requested MRF who agreed to do this. They put up a special factory for that purpose and did it. The numbers required at that time were very meagre. Sometimes it used to 100 and sometimes it would be only 50. Also, the MRF was not sure about when the next order would come. So, they stopped this factory. I spoke to an official at the MRF who said that he had much for the country and was prepared to work even at a loss, which it was while working on the Arjuns. But the contract for T-72, T-55 and Vijayanta had been awarded to some other company. When I checked with the Defence Ministry, I found out that the contract for rubberisation for the rest of equipment was given, I was told it was given to the firm which gave the lower tender. MRF stated that they cannot keep the assembly lines waiting and pending for ever. There are other examples. The Kirloskars were doing the hydroneumatic systems for us. The last order was for 14 tanks. After that there was no order for seven years. For the company, the investment in specialised production lines is a dead waste and they need to be subsidised. One has to ensure that the assembly lines are kept alive, the technology, and skilled labour are kept alive for defence purposes. I am told now that they are restarting this process at the Kirloskar plant, which did a fabulously good job.

Tehn there is the problem of diversified equipment in the army. For instance, it is claimed that 67 per cent of the parts of the T-72 and T-90 are common. I asked the HVF as to why they are importing everything if 67 per cent things are common between the two tanks. I was told that it was not possible due to the transfer of technology agreement. The question is if the transfer of technology has already taken place with regard to the T-72 then why were we not able to build the T-90 with the least amount of imported technology. One expects that if you got something once into the country, then we should not be going back again and again for the same thing. There are many private companies that could be involved in the Arjun production, including the Tatas, Mahindras, Ashok Leyland etc. who are quite capable of taking on some of these jobs. The best part is that we have within the country PSUs such as the BHEL which is also capable of building tanks. Two tanks were built by BHEL Bhopal.

As far as the Arjun is concerned, five have been produced and handed over to the users for trials. Arjun has been worked and thought out for a long period. It is one of the finest pieces of equipment. The Arjun's mobility with its 1400 horsepower engine is very good. The engine though it is old equipment. This powerpack is no longer used in Europe. We got the 1400 horsepower since the 1500 HP engine was only for NATO allies. However, it is a big powerpack and the one they produced later is smaller for which the tank would have to be redesigned and the cost would be astronomical. They said they had stopped manufacturing these engines and if we wanted them they would restart the whole thing for us. This has been done. It has been restarted. The problem lies with placing orders both with the manufacturing agency and the Ministry of Defence. When we know that we need 124 Arjuns tanks as well as Bhim tanks which will carry the same engine, but we do not place orders well in time. I have been told that the orders never went beyond 30-40 at one time.

The question is how long will we continue to import tanks. Today we have the T-90s and we are going to start producing it. But somewhere we have to stop. After T-90 are we going to import either the T-100, the T-200 or the T-300. When Israel first produced the Merkava MBT, Ariel Sharon was the DG CV. He walked up to the team and asked them what was the problem. After the team explained the problems, he said that this particular tank would be called Mark I and that they would produce it despite all the problems. The Mark I would be given to the troops and work would start on the Mark II, which would better than this one. That is how the Israelis did it. Somewhere we have to start producing. Somewhere we need to have the capacity within ourselves to be able to do that and then improve that equipment. Presently this is just not happening. The engine itself has really no problem but the problem is with regard to the size of the order. The Arjun's 120mm gun with the FSAPDS and Hash ammunition, is excellent. The integrated fire control system had a lot of problems. We had got it from the Dutch but it had an American component in it. Suddenly we were throttled as the Americans said that the Dutch could not supply this to us. After some time, we were able to get France  to redesigned the entire fire control system. Now we have an excellent fire control system. Tactically, Arjun is a fine weapons system though it looks big and very heavy. Its tactical silhoutte is very low. The T-72 and the Arjun in a hull down position are not very different. In a hull down position, the tank gives you the same silhoutte as any other small tank. Also, its speed provides security in the battlefield. Its firepower is tremendous. Particularly on the move, its firepower is very accurate and good. Some people say that the Arjun is not strategically feasible due to its size and weight. Fortunately, the Arjun has been running all over the railway system of India and has been running all over the western deserts on tank transporters and without tank transporters both.

We have a good tank but we still have massive problems. What the solution is one really cannot say. Dr. Santhanam would remember, a paper had been prepared many years ago which laid down how we should go about manufacturing major defence equipment. Arjun was one of the things in that paper. The paper started with an Advisory Committee at the highest level and then having four elements to it: the user, DRDO, manufacturer and the financing agency. All these were to be placed under one person to work as a single body to ensure the job is done. Presently there is no coordination of any nature on whatever is happening between them. It only happens when the Chief holds a meeting and asks about the progress on the Arjun. The users need to think ahead and have to somehow or the other facilitate the production of equipment even if it is not the very best. At the same time, the user also asks the question that if China, having used the Russian equipment, has produced the T-59 which is a copy of the T-54, produced the T-62 which is a copy of PT-76 and produced all these MiGs under different names, what is our problem? The Chinese defence industry has gone so far ahead of us. We continue to rely on transfer of technology.

Another point that comes in is export and joint ventures of various nature. Export of defence equipment has been taboo. Perhaps if we had encouraged it at some point of time, other industries may have come up, which could have independently developed certain systems and exported them. At one point of time, the South Africans were very keen to tie up with us on Arjun and wanted to work together. They wanted only about 200 tanks which they said we could produce for them. That sort of a thing could also be done. However, it did not happen. Assembly line is another issue. Once it is started, it has to be kept going otherwise you will lose whatever money is put into it.

Indian Navy Indigenisation - Commander (Retd.) Reza Khan

The Navy was one of the first services to go in for indigenisation in a very serious manner, the reason being historical. After independence when the Navy needed new ships, our experience with foreign suppliers was not very good. We were offered only WW II vintage ships or the experimental ships which UK was making. For example, we got INS Delhi and Mysore and the Vikrant, all of which were of  WW II vintage. The experimental ships were of the Brahmaputra and Kukri classes, which were not deployed in the Royal Navy at all and were single purpose ships. Our experience with submarines was even worse. In the 1960s, when Pakistan got its first submarine, Ghazi, we went to US thinking that after 1962 Americans would be sympathetic to us given the balance of power theory. But the reply was really harsh. I have seen it in defence ministry notings that the Americans said they did not share our threat perceptions and Pakistan was a smaller countries, which required weapons for sea denial and that submarines are an invaluable weapon for a smaller country which is threatened by overwhelming Indian forces. This kind of experience forced us to look at indigenisation. We have had a succession of Chiefs who were completely obsessed by indigenisation. That was their single point priority from the time they took over. The Navy went in for indigenisation very early. We went in for ship building in the mid 1950s. We built some survey ships and some small boats. The first serious attempt was made in 1960s when we built the Leander class frigates. After that we have never looked back. We have gone on building ships of various kinds. We have Godavari class which is a completely indigenous design; the Brahmaputra class, borrowed Russian designs, etc. We are fairly advanced in ship building. Nothing equals the complexity of ship building. Where else could you have, in a space of about 120 metres by 10 metres by 6 metres, equipment worth hundreds of crores. Ship making is a very long and complex learning process. Countries like Japan and the US have been building ships for hundreds of years.

The Indian ship building industry, especially the warship sector, has done a very good job in the last 30-40 years. But there are lacunae. In the area of indigenisation of major weapons systems and sensors, our experience with the DRDO has been mixed. In some cases, we were very successful and in some we have had dismal failures. Communication equipment are the least complex equipment that can be easily be made. There are standard designs and there is very little involvement of the DRDO. It is mainly produced by public sector companiesl like HAL etc. We went for it in the 1960s and by mid 1970s we were producing a good amount of communication equipment. In sensors, we started by borrowing designs. We took Dutch design for our Leander class frigates. Then we went on for British radars which we indigenised and then finally to our own indigenous designs.

In sensors, we have been successful with sonars. This is due to individual genuis. We have an officer in the Navy who came through the NDA. He had joined DRDO and supervised the HUMVAD design,  which was really successful. The world has moved ahead and is now producing shallow water, low frequency and various other kinds of sonars which are more complex. The Indian navy is sadly lacking in littoral sonars. After HUMVAD which is an older sonar, we have not been able to produce world class sonars.

Regarding electronic warfare equipment, we started very early. First we came up with an equipment called SHAPE, which was a failure. With our cooperation with the DRDO, we went ahead and produced AJANTA which was partially successful. It had number of flaws in terms of multiple tracks, high rate of failure, low reliability. Finally we embarked on another EW project called SANGRA. When I was DNS, I introduced a new dimension. When we buy hardware, which is going to last for 20 years, we must look at technology which is in the conceptual stage or are about to be translated and not those already in use. This is because by the time you prepare this equipment, which takes six to seven years to develop, they are already obsolete by the time they are delivered. Ultimately, I got a document from DRDO after much persuasion for 2 years. We then went ahead with SANGRA and I hear reports that this EW programme has been very successful. So this is first time in my experience in terms of EW that everybody wants DRDO equipment in preference to even the imported equipment we got from Israel. There were people who wanted EW equipment on helicopters and for the middle level aircraft like Donniers and for TUs.

As for missiles, the Navy's experience has been bad. Enough has been written about it in the newspapers. We have three ships going around without a close range weapon because Trishul could not be delivered and there were a number of other problems. Whatever missiles had come had difficulties in going through the accepatance procedures and there have been deficiencies. Practically no naval gun has been made by us which is effective. The Navy spent an astronomical amount to import from Israel the Barak close range anti missile defence system.

We have more than 50 labs, thousands of scientists and thousands of supporting staff, yet we do not have enough work because services are not giving them enough projects. We have built this grand infrastructure without assessing the quantum of work we require. Why have we built this empire without having sufficient work to offer? I went to the Tata Institute of Fundamental Research (TIFR) and I found that they did not have great infrastructure. They said that there is no point in building infrastructure without having the talent for it. If we have a man with ideas then we build the infrastructure around him and provide him with whatever he needs. Similarly, the DRDO needs the best brains in the country in order to be able to manufacture something really world class. I feel that the DRDO should be much leaner and smaller, and much more prestigious. The DRDO should pay much more in order to attract the best talent. It must be structured in such a manner that the best brains in the country consider it to be a matter of honour to be in defence research.

Indian Air Force -  Wg. Cdr. (Retd.) Praful Bakshi

It has been a very sad story as far as the indigenisation of our air force is concerned. HAL was producing large numbers of aircraft during the WW II. They license produced all WW II aircraft and a number of American combat aircraft including the P-38 Lighting, P41 and P51 but all that came to a halt after independence. The Americans wanted to establish an autonomous area and wanted to build a massive aircraft area for India but the Indian government did not agree. Thereafter, HAL license produced VAMPIRES. Some of the remarkable productions of HAL included the GNAT, which was license produced by us. It was rejected by NATO. It was rejected by the British, who did not want to fly the fighter but only wanted to fly the trainer. India took it over and made it a very great success. However, our Achilles heel remained, which was the engine. India does not produce any combat engine whether it is for ground, air or naval purposes. As far as air engines are concerned, we are still at point zero. After the GNAT started flying,  Kurt Tank designed the HF-24. It was a remarkable aircraft but the HF-24 fell short due to the lack of a proper engine. Rolls Royce agreed to make an engine for it and the cost was coming to rupees seven lakhs more per engine. The Indian government thought probably that was too much. So they said let us do something else. By deft re-designing they fitted two GNAT engines on the aircraft. The aircraft was very good but in the initial stages it was always under powered. With a proper engine, the aircraft airframe was designed to fly at Mach 2.6.

The F-22, as everybody knows, is the only aircraft which flies supersonic without afterburner. A number of trainer aircraft of HF 24 went supersonic straight and level and it has no afterburner. Our planners  never gave importance to this aspect. We never thought that this is a great tactical advantage for India. Senior personnel did not want to fly this aircraft because the worksmanship of HAL was not up to the mark. Therefore, they said that let us ground the HF-24. And the HF 24 was grounded overnight, although some aircraft had flown only for 5 hours and some only for 7 hours. In fact, you could smell the fresh paint in the cockpits and the aircraft was dropped and HAL was very happy. They were very happy because nobody wanted an indigenous programme. So the HF-24 now lies all around India in various fields. That aircraft could go 640 knots, low level with four tanks and no modern day aircraft even till date can actually catch it if it performs that way. When the HF 24 story starts everybody wants to keep look the other way because it is a great embarassment.

We also started making MiGs. MiG-21s comprised 75 per cent of our fighter fleet at one time. Today, the MiG-21s have the biggest problem of spare parts because Russians twisted our arms and said that we should stop making the aircraft. Why we stopped and listened to them, I do not know. We are suffering because of lack of spare parts etc. This is what happens if you lack security and national doctrines and you have no indigenisation programmes.

ALH is the only helicopter which has been successfully developed. Of course, how much of it is indigenous I will not be able to tell accurately but the ALH has been quite successfull because we could not manufacture Russian helicopters. The Light Combat Aircraft (LCA) came up as an idea during the 1970s. The airframe design is fine but we dont have an engine. The Kaveri is still in the making. Lockheed Martin decided to help us out with an engine. But when we fell foul of America on our nuclear policy issue, they embargoed it and the LCA suffered. The LCA would have by now gone into the squadron service had America not forced Lockheed Martin to stop the aspect of control services they were providing us. The GE 404 engine, which is being provided to us is still being evaluated and tested. I do not know how successful it is but LCA has become late by around 8-10 years and the LCA will not be in squadron serviceit before 2010 . Though it is supposed to be a fairly good aircraft, by the time it comes to squadron service, it may not be a frontline aircraft at all.

Many of us have been surprised by the recent proposals by America to both India and Pakistan for supplying F-16, F-18 and other various weapons systems. Fact is that the US has offered us equipment from time to time. After the Korean war America offered India 80-90 C119 Fairchild packets for free. India, of course, paid a token of 5000 rupees each and did quite well with the aircraft. They fitted an Orpheus jet engine on it for high altitude performance. Before the 1971 war, America offered us the Northop F-5, Freedom Fighter. Unfortunately the war started and the whole thing was shelved. During the 1962 war, America nearly forty C-130 Hercules were made available to lift the our artillery from the plains of Punjab to the northeast. Unfortunately India had given up and the war was over. In 1963, when F-104 starfighters were in the market, Pakistan and India both opted for it. America supplied it to Pakistan and not to India. India then went for MiG-21s in a big way from then on. Once again in early 1980s, when the IAF was going in for Jaguars, Americans proposed the sale of F-20s, the advanced version of the F-5, e Tiger Shark, which failed in a ground attack role and the USAF itself rejected it. In 1980s, the Advanced Jet Trainer came up. India evaluated six aircraft, selected two of them - the Alpha Jet and the Hawk. Americans again came to South Block and fielded their F-5 trainer version, the Talon. But they were too late in that game. Today, F-16 and F-18 sales have been proposed. If India goes for F-16s then we will be spending Rs 24,000 crores on this project. We have now to decide whether should we go for it or not. In the joint exercises with the F-16s during the Cope India exercises at Gwalior, the MiG 29, Sukhoi, Mirage and the MiG21 Bison did extremely well. Later, the Singapore Air Force F-16s went for an exercise with India and both F-15 and F-16 came up much behind the Indian man-machine combination.

The reputation of America as a supplier is not very bright. I have told you about the Lockheed Martin case for the LCA, that they let us down. Then the Sea King helicopters and the Harriers were grounded for a considerable time because the spare parts supplied to us came under American sanctions and we could not get that. India I hope must work towards its own advantage. India has to be very cautious. This is why a number of senior Air Force officers have said that we would like to go for the Mirage 2000 because it will be automatically amalgamated with existing ground and training infrastructure.

What we must learn is that there are two aspects. First, there is no substitute for indigenisation as Dr. Santhanam was telling us vis-a-vis direct purchase. India has realised in the last 3-4 years that this is very important. The Confederation of Industries of India did a remarkable job along with the MoD and the three services and DRDO. They got together and decided that indigenisation can take place. The Indian air chief at that time allowed them to hold exhibition in Subroto Park and 75 entrepreneurs were brought in and they all decided that various fields where they can develop. Dr. APJ Abdul Kalam and Defence Minister Fernandes decided that we will have six task forces for various areas where indigenisation can take place. This is where the CII has done a very good job.

The last point is what are the terms and conditions based on the political stand and issues of the supplying party? Keeping in view India's stand on non proliferation, CTBT, MTCR, various human rights issues etc, we do not want to get strangled because we fall foul on any of these issues. The defence deals are very complicated but we must understand it starts an arms race. It is the F104 to Pakistan which started the arms race and we went for the MiG-21s. It is the F-16s that started the arms race and we went for the MiG-29s and Sukhois, Mirage after that. The sudden Pakistani surprise order of 300 T 80 tanks to Ukraine started the race and we had to buy the 310 tanks from Russia, the T90.

Political considerations of arms deal have to be kept in mind. Right from the late 1950s, America has been eyeing China as a potential future rival in Asia if not an outright threat. This is one reason why the US is improving relations with India. There are other issues as well. For instance, nobody has discussed what the Russian reaction is going to be to an emerging arms relationship with the US. If we are going to give Rs. 24,000 crores to the Americans in one deal, the Russians will not be very happy. Moreso, because after that there will be a constant inflow of American technology and influence. Yet, given that eighty five per cent of Indian military hardware is Russian, are we prepared to antagonise Russia?

Defence Research - Dr. K. Santhanam

I would not like to respond to any particular statements on the LCA or the Arjun. But I would like to raise the level slightly in terms of lessons unlearnt or new lessons to be learnt. The first point is I would like to talk about is the process of GSQR itself. It has been characterised in very simple terms for a layman to understand. It is called BBC - Best of Brochure Claims. The answer comes back from Indian R&D is that UDIPI - you demand and I produce immediately. There is a mismatch between the specifications as rolled out and doled out and the preparations to meet the GSQR. I would only submit that where the GSQRs have been worked out jointly by sitting across the table because even if you want it to be state-of-the-art, and you can design it, it is highly unlikely that you will get the components that go along with such a system to make it contemporary because those components are not made in India for techno-economic reasons. You may have to get it from outside. By force, you have to design, what I will call design-to-availability in terms of spare parts because you have a vulnerability in times of crisis, if these components are not available from abroad.

There is this complex situation, you have to understand. Whether it is the defence production or the R&D together there is this problem of critical component or materials' availability looming large. I would like to say that the more it changes, the more it is the same. I have been in India for 16-17 years and I have been in other places too. I have not come across one new single suggestion in any of the meetings I have attended involving defence industry and production including involvement of the private sector. We know what is the panacea and the spectrum of chaos but there is some difficulty in implementing. So I will be grateful if SAPRA at some stage can say what is the difficulty in implementing all these wonderful suggestions from the best minds whether it is from the services, industry or from research. I would like to mention only one particular difficulty that we have faced as the R&D community in general, both in space and in atomic energy and defence research. This is more acute in the defence R&D, industry. This is what I will call the 'continuous negative gradient', which the R&D agencies always face. When there is a product or a weapons system that can be designed based upon initialy reactions, the responsibility is carried fully by DRDO - interaction with the users, persuading finance, getting the production agency on board and getting DGQA into the act. Having done all this and when the technology of transfer is ripe, the PSUs have difficulties in accepting. Of course, the Ordnance factories will always have difficulties in accepting it. So if Gen. Roychowdhury said that we have placed 130-140 people for MBT Arjuns to be in HVF Avadi, that clearly indicates the kind of difficulty that the DRDO faces. That is the technology receipient, pre identified as either the PSU or the Ordnance Factory Board, is a reluctant partner. The hope now, with the Kelkar Committee already functional, is that we will involve more and more the private sector especially some of the middle to large level private companies which have an interest. There the difficulty will be how do you reimburse them. Supposing the promised orders do not come, you have to pay for them. Someway amortise what they do by the way of R&D. But this continuous negative gradient has to be eliminated. The only way it can happen is through synergy involving the users, production agencies, R&D, DGQA, Finance, and hopefully other senior bureaucrats in the Ministry of Defence.

I would like to say that it is worth looking into the difficulties in implementing these wonderful suggestions. Another point I would like to make is that there was some comparisons about the Tata Institute of Fundamental Research (TIFR) and the DRDO. It is a completely invalid comparison because the TIFR is a research organisation doing essentially fundamental research. They recruit people who come and do their PhDs and go out. It is unfair to compare to the DRDO and TIFR. By the way, the DRDO has tried to recruit and tap the best of talents. It has been going on. Where they find it difficult is that they feel that the Ministry of Defence means that they will put a 'Burkha' (veil) around you. We have tapped the best of talents in the country already. There are ways in which we involve them in various moulds and the DRDO in fact funds research. The Indian Institute of Science (IIS) gets the maximum amount of research grants from the DRDO. These are facts that must be kept in mind. I would also like to say that the services have 'champaigne taste and beer money'. Having understood that, if you want to me to produce champaigne while I am making beer, give me time to produce champaigne.

I would like to propose something called T³I - Threat, Technology, Tactics and Intelligence. The reason I am saying this is that I have directly experienced a situation where the threat was highly exaggerated. People from the services have actually told the Defence Minister that we will lose the next war with Pakistan. There was information available that it was totally exaggerated and something simpler could meet the technological challenge and it was met. I cannot give any details because it is in the realm of electronic warfare about which something was mentioned earlier. I would like to see the services becoming more and more intelligent buyers. I used the word intelligent buyers. It has a definite meaning and there is a definite process by which the services could become intelligent buyers. Especially when we are flush with funds. When the available budget is very low, the services will happily go to the defence PSUs or the DRDO and get it because there are some funds available. More so in these flush situations, there is the need of being an intelligent buyer is important and in this direction, I hope that the Defence Procurement Board, which has been recently created, would get the right talent, whether it is finance, contract or specifications and negotiations.

A word about criticality of project schedules. There are a number of reasons why projects get delayed. There are valid reasons which have to be understood. These are many a times beyond the immediate control at the start of the project. These are realities. Mid way through, as was mentioned earlier, you could have technology embargo, because some other decision has been taken by the government. The second point is that we are not part of any alliance whether NATO or any other. So we do not have the zone of comfort available to others who are involved in defence subcontracting or co production or co development. Here I would like to mention that European countries that are part of NATO have a similar complaint. When it comes down to co production involving US as a source of technology, their difficulty is that they are not getting enough information because the Armed Forces Export Act of the US with its stringent clauses prohibits, prohibits and prohibits. So there have been interesting ways especially through Osmosis, by which some amount of technology transfer occurs. No wonder, the technology base in Europe is weak. There are limitations to our choice of partners also. After the Soviet Union has collapsed, we are moving more and more into alternate sources of technology in Europe though we are not yet abandoning the Russian connection. More so because the services want more state-of-the-art equipment, more miniaturisation, more micro electronics. Here I would like to mention something about the SU-30 experience. We have put in about eight microprocessors in the SU-30. The electronic warfare, the radar warning receiver and the jamming techniques will all be done here. Therefore, especially with respect to EW, the SU-30 is likely to contemporary and certainly superior than what the Russians can offer. The Russians EW technology for a number of years has been very simple - noise jamming and more noise jamming. The difficulty with jamming is that you become a beacon and an anti radiation missile can come and knock you out. The best way is reception jamming with some intelligent noise jamming wherever it is possible.

I would to throw some light on other issues. In two major programmes, the DRDO has involved and created smaller and independent quality control organisations and funded them. In such cases where you have the DGQA separate but co-located within your campus and you keep feeding him with drawings and test results, it becomes easier. Otherwise, they will be in their citadels. I have given some computer and CATCAM software to few organisations because they did not have it. How are they going to verify and certify digital flight control software when they are lacking in equipment and of course manpower. But you have to take them along. We have done that in the LCA and in the missle programme. I would rather light a candle than curse the darkness.

In terms of indigenous R&D getting into production via the TOT route, I had a done a detailed analysis as to what is happening. You have X thousand crores worth of production that comes out of the PSUs or the Ordnance factories. How much of that is essentially based on what was developed in the DRDO and then passed on after due tests, evaluation and clearance. Typically in that period I was analysing, the total value of production, I use the term value of production as the Ordnance Factory Board and the PSUs have a different way of costing. In one particular year, in the mid 1990s, it was somewhere around 3,000 crores. Out of that, what was going from technology transferred through the usual classical route was coming somewhere around 900 crores. This is not a bad number at all if you go by Western defence industry numbers of what amount of R&D actually ends up in finished product acquired by the services, amortising R&D, which they do, but we don't. I would say that there are islands of excellence and some of these are known to the services. But the problem is that some of the services are large and some are small. The bad news is always page 1. Good news always gets tucked away. I would imagine that there is a need for PR management, image management. It is a mischevious phrase. This has not been done consciously, this has not been done well and partially the media is to be blamed. I interacted with many mediapersons, called them over to the South Block especially when some obviously inaccurate story had come out. I will not say which newspaper it is but they apologise but the apology is not published. The damage has been done. I remember one particular story on the MBT. It was front page half the first half, middle page half the next day, written by a person who can't even spell tank and I probed it. To my surprise of surprises, the article was actually written by somebody from the American defence industry and given to him when he went to USA.

For this group, I could say that I had made one statement. Let me repeat it because it is pregnant with meaning. The projects in which there is an initial convergence between the users, the R&D agency and the production agency, these three are very important. Otherwise you have a situation where you are all dressed up and nowhere to go. This again, I use a word 'negative gradient', we had to put all these things together including the finance and then the tests, evaluation etc took place. I must say to the credit of the services that they used aircraft like taxis when test and evaluation was to be done. Due to this kind of convergence, in exactly eighteen months, the product came out and it was superior to anything being offered or anything available because of various export control problems. There are many shouts of joy but there is a larger number of shouts of anguish. We had done an analysis of about 540 projects. Some of them were legacy projects which deserved to be closed. When I joined DRDO, I wound up 11 laboratories, created three new ones and each of the three labs are thriving. One of them, with its techology, is producing something close to 1000 crores already and in the next two years, it is going to be 3000 crores. We don't get royalty back. Don't make false claims. In the past, many labs just to stay alive created projects. Let us not talk about the 1970s and mid 1980s. Thereafter, lot more angry debates take place before DRDO takes a project. This is happening now or happened three years ago when I was present.

The synergy part of it where all of us have to be together, it works sometimes but it has to work all the time. The problem is how do you make it work all the time because ultimately we are talking about individual interphasing with institutions and this is a dynamic which no one can predict.

Managing the Peace Dividend - Gen. (Retd.) Shankar Roychowdhury

Many things have been said and equally many things are required to be said and many things have been left unsaid. Defence budgets are increasing because the cost of technology is increasing and also the revenue budget is increasing basically for paying allowances for more and more people. I am a member of parliament and this is something that I have tried to put across to the people around me. I say that defence expenditure is the life insurance premium that every nation has to pay every year exactly as you pay in your private life for insurance cover. The point is what type of cover do you want. You want good cover for the future, God forbids, something happens, you have to pay a higher premium. If you want a good security environment you have to pay a higher premium. How high can you pay. Because a lot of voices are coming up as there is peace. We are having talks with Pakistan. Terrorism is hopefully dying out. Conventional war is apparently not on the horizon. So how high an insurance premium you are prepared to pay. This is the bugbear which keeps coming around: can you predict the future. Today, yes things are fine. We will hopefully progress with Pakistan and things will sort out. China's peaceful rise is there and their leader are coming and speaking to us. But also understand, China's defence spending is increasing by 18 per cent every year also in this peaceful rise. China is moving rapidly forward to making her Air Force qualitatively and quantitatively one of the largest in the world. For example, we are talking of SU-30s, their apparent target is 700 SU 27s which is a version of the SU 30. China's strategic forces, including missiles, are increasing. Her navy is increasing. Sure it is a peaceful rise and I hope it stays peaceful, not today but what is today. I am not talking of tomorrow. Can anyone predict the future for 20, 30 years etc. We don' t know. So what kind of a security system should we have if we have to keep on paying this life insurance premium. Firstly, do we stop paying this life insurance premium or do we cut it down, cut down the quality of cover we have. It is a very good way out because cutting down defence expenditure is politically a very sound move. It will get you support and there will be no backlash within the country and people will applaud you. You will probably get more votes in the next election because you have given more money and you will say that we have cut down on our defence expenditure.

The biggest challenge facing the armed forces today is really speaking managing the peace dividend. Within the environment of peace that has come or is coming, how to ensure that the security environment and security capability of the country is not affected in any way. What quantum should you have of the army, the navy and the air force? For example, Gen. Shankar Prasad said the army is manpower intensive. Yes it is. We have been through that system all our lives. It is manpower intensive because the jobs it is called upon to do are manpower intensive. You take out counter insurgency and say the police will handle it, the paramilitary forces will handle it, half your troubles will go. Certainly, you can cut down. The army is manpower intensive because the Line of Control is manpower intensive. You give that to another agency, you give to the paramilitary forces, army will be cut down. There is no problem in that. So it is a question of the type of task that the nation gives us. If other agencies are prepared to come forward and take up the task of keeping the nation together, incidentally we are very happy about Kashmir. We are looking forward to a bright future. Why is the future bright. We must analyse that. The Kashmiri people are fed up of violence. Why are they fed up of violence. Because it has been shown by the defence forces that violence will not pay. It is as simple as that. People are fed up of violence because somebody has said that violence will not pay. You want a thousand year war, fine, we will be around for a thousand years. So when we say that there is an atmosphere of peace, we must also appreciate why there is an atmosphere of peace. I would say that there is an atmosphere because the country's armed forces have prevented your north east from becoming a Cambodia and your Kashmir from becoming another Afghanistan.

This has happened without paying the so called life insurance premium. I and Gen. Niranjan Malik have been through the bad years. There were no socks. Forget about tanks and guns and ammunitions. Now we are in good times. We are living in a cycle of events, if you believe in that. What is happening today is that there is peace. Hopefully it will last forever. Chances are that it will not. So when we calibrate our defence expenditure, we have to remember that though logic may say that war is bad but human beings are illogical people and we do not know what is going to happen 20, 30 years hence. So when there is no threat existing, reassess the threat, short term and long term. Short term you cannot assess. Then build up your defence forces capability based rather than threat based. There is no other answer. In the process, you will keep some threats at the back of your mind. China is an obvious contingency. Today we are entering into a Hindi-Chini Bhai Bhai phase II. Hope it will last for a thousand years. But then it may not last for a thousand years. So while we control our expenditure, we must keep this background in mind.

The army is manpower intensive. So one of the things is that remove some of the tasks that have been given to the army. Increasingly as we are seeing in J&K, the J&K police is coming up, the paramilitary forces are coming up. Pull the army out. We are raising Rashtriya Rifles battalions. Gen. Shankar Prasad knows it more than anybody else, he was DG, Infantry. It is purely because other agencies were not capable of handling it. What to do. We know there was no budget for the Rashtriya Rifles in the beginning. So this is a very complex issue and we are living in the good times and we have forgotten the bad times. We are living in good times, we hope these good times will continue but I think it would be advisable to remember that nothing is permanent. Neither bad times nor indeed good times. So when we try and build up, we talk of defence and national security, the first thing we should remember is the good times don't go on forever. We have to prepare for bad times though the bad times may not come. If you are prepared they may not come. This brings me back to the theme of this part of the discussion: Indigenisation. The points came out and I was hoping for more discussions on this. Firstly there is a feeling about Made in India has to be second rate. It is probably not true now but that is the impression many people have including lot of people in the service. For example, the Arjun. The story I tell, I don't know whether I have told this to Dr. Santhanam. We were trying out one of the earlier versions of Arjun. As a Mark I it is a great tank and I totally endorse what Gen. Niranjan Malik is saying. But in the early stages when we were trying it out, one of the parts of the tank just sheared off. We were going at about 40 kms an hour. That is about 50 tons weight travelling at 40 kms an hour. It is a frightening sight. The sprocket just sheared off and the tank nearly overturned. Somehow it came to a halt, smoke coming out of it. The driver, who happened to be a big burly Khalsa of the 7 Cavalry, he looked around and found the debris lying around. He picked it up and he told me in Punjabi, Saab look at this. I said it was broken off, what can you do about it. He said Saab the sprocket is intact. The only thing that has broken off is the bolts have sheared off and he said Saab Hindustan mein eko hi cheez bani si, wo bolt, wohi tuth gayee  (Sir, the bolt was the only thing made in India and that too broke off). So this is an impression we have. It is a brand image. Hopefully it has changed by now.

We have to indigenise. I do feel the process of indigenisation must go on even if Indian products are not as high grade to begin with. The Israeli Merkava story was a brilliant story. When they told Sharon about all the defects, he said make this your Mark I. And then we will have an Israeli tank. I think that is the way for us to go. In the process, all of us must understand, particularly in the services, that when you develop indigenous engineering of this type, you entire economic, industrial, and technological capabilities and ultimately your overall economy will be pulled upwards. That is another reason why we have to indigenise.