‘Empowered’ DRDO to Speed Up Delayed Projects

By Anantha Narayanan K 19-Jul-2018

Close on the heels of delegating more financial powers to Armed Forces in the last one year, Defence Research and Development Organisation (DRDO), India’s apex defence R&D organisation, too gets financially empowered.  Aimed at the enhancement of Defence Research establishments with improved efficiency and effectiveness, the Defence Ministry has finally decided to delegate greater financial autonomy to various authorities. This wind of change in Defence Research and Development (R&D), announced by the Defence Minister, Nirmala Sitharaman, is intended to neutralise the ill-effects of over-centralisation and facilitate quicker decision making in defence manufacturing and the ongoing indigenisation. Above all, the new decision is expected to put the defence and procurement projects that have been lagging due to various constraints in top gear.

What are the new powers delegated?

The delegated powers now stand enhanced are the following. The Powers of Secretary, Defence R&D, to sanction projects and for procurements enhanced from Rs.75 Crores to Rs. 150 Crores and for the Directors General (DG) enhanced from Rs.50 Crores to Rs.75 Crores. The ministry has approved the enhancement of powers for Proprietary Article Certificate (PAC) cases from Rs.50 Crores to Rs.150 Crores for Secretary Defence (R&D); and from Rs.25 Crores to Rs.75 Crores for DGs; and for Lab Directors it is from Rs.2 Crores to Rs.5 Crores for Lab Directors.

The approval also includes the enhancement of powers for Single Tender cases from Rs. 50 Crore to Rs.75 Crores for Secretary Defence (R&D); from Rs. 25 Crores to Rs.37.5 Crores for DGs; and from Rs.1 Crore to Rs.2.5 Crores for Lab Directors. All Competent Financial Authority are empowered to reallocate funds, reduce, and enhance costs of projects/programmes within their delegated powers. The powers of Director General (DG) have been enhanced from Rs.3 Crore to Rs.5 Crore for sanctioning Research projects to Universities, Technological Institutions and to Indigenous Defence Industry under the Technology Development Fund Scheme of DRDO.

Powers of post-contract management and maintenance support in respect of contracts for which CFA is the Ministry of Defence, have been delegated to Directors General of DRDO in line with the delegations already made to the Armed Forces. Delegations for Hygiene and Maintenance Contracts, training expenses, miscellaneous and contingent activities have been rationalised and enhanced to ensure that sanctions are given at the Director and DG levels with minimal flow of files to DRDO HQ.

Consequently, the powers for sanctioning of projects and for procurements that were hitherto with the Secretary Defence R&D have now been delegated to the Directors General of DRDO and the delegation to the Secretary, Defence R&D has been doubled, several powers relating to day-to-day functioning that were centralised at DRDO HQ have now been delegated to the DGs and Lab Directors. The delegations also bring flexibility in Universities and by indigenous defence industry. All the delegations that had been made in respect of the services have also been extended to the DRDO.

Revival of Defunct DSTMC

Another major step the Narendra Modi government has taken towards restructuring and revamping the DRDO is by reviving the defunct DRDO Science and Technology Management Council (DSTMC). The revival of the council is under the chairmanship of Principal Scientific Advisor K Vijayraghavan with Secretary, DRDO; Chairman, Indian Space Research Organisation (ISRO); Chairman, Atomic Energy Commission; and secretaries of the department of science and technology, and department of earth sciences as other members. The reconstituted DSTMC is a high-profile body to chart the future of DRDO laboratories in synergy with the science and technology department.

DSTMC will do a review of the functioning of all 42 laboratories of the DRDO and existing science and technology laboratories so that there is no overlap of work and synergy between the defence, space, atomic energy, and educational institutions involved in high-end research. The Council will also decide on research and development priorities in the defence sector and will set the agenda for the DRDO to engage in top end technologies or functional day-to-day technologies.

Why is the Delegation of Financial Powers Good?

The new decision to delegate more financial powers to the DRDO will provide it with some much-awaited autonomy as well as decision-making power. Reposing greater decision-making powers with the Secretary, Defence Research and Development—who serves as DRDO chief—and its seven directors-general (DGs) who serve as cluster-heads for the broad areas of DRDO’s research-focus is a welcome step in the light of ongoing defence indigenisation drive.

One of the major hurdles before DRDO is the lack of adequate funding and the autonomy to use the allotted funds. The DRDO chief can now sanction projects/procurement up to Rs 150 crore while the DGs can sanction projects up to Rs 75 crore. This allows them to take up new projects of strategic importance. The DRDO receives just 5-6% of the defence budget, while the comparable figure for China is 20%. If salaries and other revenue expenditure are taken out, the actual amount for defence R&D is quite less at just about Rs.9000 Crores, of which around Rs.5000 Crores is for strategic systems. DRDO needs at least Rs.5000-6000 Crores more for R&D. So, greater decentralisation of funding powers is certainly appreciable, but the government needs to implement them effectively at the earliest if DRDO is to become truly efficient.

The new decision could bring change to the common accusation that project delays have become a “part and parcel of DRDO’s functioning”. In March, Parliament’s standing committee on defence, headed by BC Khanduri, hauled up the DRDO for serious delays in projects and wastage of tax-payers’ money by leaving projects mid-way. Over Rs.2.65 Lakh Crores worth projects have been inducted or are under induction into the military, but most projects are hit by huge time and cost overruns, except some like the Agni project. The LCA Tejas project was originally supposed to be completed by 2008, but, the date of completion has been revised to June 2019. But, now the LCA project has failed to meet another deadline to get Final Operational Clearance.

Similarly, the Kaveri Aero Engine is facing several constraints in its development. The induction of Arjun Mark-II with 73 upgrades is yet to be inducted into the army which is facing shortage of combat vehicles. The two-tier Ballistic Missile Defence (BMD) System development, began in the late 90s is yet to become operational. Two Airborne Warning and Control System (AWACS) aircraft, approved in 2013 will be ready only by 2024. The Nirbhay land attack cruise missile is yet to be combat ready.

But, with these changing measures announced by the ministry, are expected to make big changes to these projects as DRDO can exercise its decision-making power more easily. Looking at the geographically dispersed Clusters and Laboratories, this move will greatly reduce file movements to and from the headquarters and facilitate faster decision-making. The Director Generals of DRDO has expressed their satisfaction at this major initiative by the Government and have opined that these forward-looking measures would ensure that majority of the decisions relating to implementation and functioning would largely be taken within the technology clusters whereas policy issues would primarily come to the Government.

The setting up of DSTMC and the empowerment of DRDO’s financial powers are all designed to boost indigenisation and promote domestic industry to build high-end platforms to reduce global reliance for military hardware. Let’s hope that these amendments will give major fillip to the delayed defence projects and strengthen the indigenous defence manufacturing sector.