Interview/ Manohar Parrikar, defence minister
The defence budget is going down in terms of percentage of GDP every year. Is it going to impact modernisation?
Not at all. There are many ways of saving money, which will help the budget in a way. We can get into hard negotiations, which help save money and reduce cost of acquiring weapon systems. This way, we can save at least 20 per cent in contracts.
Then there are ways of saving money, like what we have done with the $2.3 billion lying in the US treasury. (India had deposited the amount over the years under the US government’s Foreign Military Sales programme, which facilitates sales of equipment and services of companies based in the US.) Though we cannot call it part of the budget, it can be spent for acquisitions.
You have been saying that costs can be lowered through negotiations. Why were the costs high to begin with, and were there middlemen involved in deals?
There were middlemen involved in defence procurements during the UPA regime. I will not go into specifics, but you tell me: why was there controversies related to two or three contracts, such as AgustaWestland, during their tenure? We have removed middlemen, and that is one way we have saved money. We have wiped out commissions from procurements, and that is why you see that we can bring down cost of programmes in a big way.
The Make in India programme will help us in a big way. We will see indigenous guns like Dhanush of the Ordnance Factory Board getting inducted soon.
But there is only a minor increase in the budget for capital procurement. Don’t you think there will be less money for new acquisitions?
Actually, there is not much requirement of funds for current procurements. Almost 85 per cent of the budget is required for committed liabilities—that means the money would be paid for acquisitions done in the past, like 2011-12 and 2012-13. Funds for acquisitions [for the current year] would be required only in the coming two or three years.
What if we require more funds for deals like the one for Rafale aircraft?
If we need more money for Rafales, we will get it. But, even if we sign the deal now, we are required to spend only 15 per cent of total funds. More funds would be required later on.
There was a time when the forces were going in for extravagant procurements, like buying aircraft for aerobatic teams.
The deals which are not very essential have to be done away with.