Military’s financial powers enhanced to speed up weapons procurement - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Wednesday 17 February 2021

Military’s financial powers enhanced to speed up weapons procurement

 Theatre commanders can now sanction capital purchases worth Rs 100 crore each, Deputy Chiefs can sanction Rs 200 crore


By Ajai Shukla

Business Standard, 18th Feb 21


Continuing the trend of enhancing the military’s financial powers for buying weapons and equipment, the Union Cabinet on Wednesday enhanced the financial powers of officers at the level of theatre commanders and Deputy Chief of Army Staff (DCOAS). 


“As per the approval… financial powers up to Rs 100 crore has been delegated to General Officer Commanding-in-Chief (GOC-in-C), Flag Officer Commanding-in-Chief (FOC-in-C), and Air Officer Commanding-in-Chief (AOC-in-C),” a defence ministry release stated.


“Further, financial powers up to Rs 200 crore have been delegated to Deputy Chief of Army Staff/ MGS (Master General Sustenance), COM (Chief of Material), AOM (Air Officer Maintenance), DCIDS (Deputy Chief Integrated Defence Staff) and ADG ICG (Additional Director General Indian Coast Guard),” the MoD stated.


These enhanced powers will apply for procurements under the category of Other Capital Procurement Procedure (OCPP) in the Defence Acquisition Procedure-2020 (DAP 2020).


“This delegation of powers within service headquarters and up to (theatre) command level for items of capital nature such as overhauls, refits, upgrades etc. will enhance the utility of existing assets and will facilitate faster processing and implementation of projects for modernization of armed forces to meet the security challenges of the nation,” the defence ministry said.


The Cabinet has also enhanced the military’s financial powers in the Make-I category of procurement, under which the government funds up to 70 per cent of the prototype development cost.


The Chief of Integrated Defence Staff to the Chairman Chiefs of Staff Committee (CISC), Vice Chief of Army Staff (VCOAS), Vice Chief of Naval Staff (VCNS), Deputy Chief of Air Staff (DCAS), and Director General Coast Guard (DG(CG)) have now been granted powers to sanction Government support up to Rs 50 crore towards cost of prototype development. 


This is part of an ongoing trend that places greater onus on the military for low-value capital and revenue procurements. On November 8, 2018, the financial powers of the vice chiefs of the three services were enhanced five-fold for revenue procurement, with an enhanced ceiling of Rs 500 crore.


This was done in order to allow the military to augment its arms and ammunition reserves in order to enhance their operational preparedness.


On June 27, 2018, the defence ministry delegated enhanced financial powers to the Defence Research and Development Organisation (DRDO) with the intention of “neutralising the ill-effects of over-centralisation and facilitate quicker decision making.” The financial powers of the DRDO chief were doubled from Rs 75 crore to Rs 150 Crore, and for the directors general (DGs) enhanced from Rs 50 crore to Rs 75 crore.


Similarly, on July 15, 2020, the defence ministry, citing the “prevailing situation along the Northern Borders and the need to strengthen the armed forces”, delegated to the armed forces the power to progress “urgent capital acquisition cases up to Rs 300 crores.”

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