Defence Minister Rajnath Singh delegates greater financial powers to the armed forces for revenue procurement - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Tuesday 7 September 2021

Defence Minister Rajnath Singh delegates greater financial powers to the armed forces for revenue procurement

Rajnath terms it a big step in defence reforms to strengthen security infrastructure


Defence Minister Rajnath Singh has released an order on September 7 on “Delegation of Financial Powers to Defence Services” (DFPDS) 2021, which delegates enhanced revenue procurement powers to the Armed Forces.


“DFPDS 2021 aims to empower field formations; focus on operational preparedness; promote ease of doing business and enhance jointness among the Services,” said a press statement issued by the ministry of defence (MoD) on Tuesday.


The three services’ financial powers were last enhanced across the board, at all levels in 2016.


The MoD said that enhanced delegation of Financial Powers to functionaries in Service HQ and lower formations “would result in quicker decision making at all levels leading to better planning and operational preparedness of the Services…”


The aim of enhancing delegated financial powers is to empower field commanders and their subordinates to procure equipment/war-like stores speedily. This will enhance acquisition of urgent operational necessities for meeting essential sustenance requirements. 


Rajnath Singh described DFPDS 2021 as “Another big step in the series of defence reforms being undertaken by the Government to strengthen the security infrastructure of the country.”


Rajnath stressed on the need to revise policies, to cater to the needs of the Armed Forces. He was confident that DFPDS 2021 would not only overcome procedural delays, but also bring about greater decentralisation and operational efficiency.


The DFPDS 2021 consists of guidelines related to the following Schedules of Financial Powers:


·        Army Schedules of Powers-2021 (ASP-2021)

·        Navy Schedules of Powers-2021 (NSP-2021)

·        Air Force Schedules of Powers-2021 (AFSP- 2021)

·        IDS Schedules of Powers-2021 (ISP-2021)


In many cases, the powers of the Competent Financial Authorities (CFAs) have been double. At the level of field formations financial powers have been deleged 5-10 times, on account of operational requirements.


Delegated financial powers of the vice chiefs of the army, navy and air force have been increased by 10 per cent, subject to an overall ceiling of Rs 500 crore. 


Financial Powers of Chief of Integrated Defence Staff to the Chairman Chiefs Of Staff Committee (CISC) have been enhanced substantially and aligned with that of the vice chiefs of the three services.


New CFAs have been added. These include the Deputy Chief of Army Staff, Master General Sustenance, ADG (Procurement)/DG Air Operations/DG Naval Operations etc. in Service HQ. Also in field formations on account of reorganisation/restructuring/functional requirements. 


New schedules have been introduced for the navy and air force, which are aligned with the existing army schedule on “Army Commanders Special Financial Powers”. Field commanders now have special financial powers to meet strategic/operational requirements.


Substantial enhancement of up to three times the existing powers has been approved in the Schedules related to Indigenisation/Research & Development.


A new schedule on hiring of aircraft and associated equipment has been introduced for Indian Air Force which includes hiring of air-to-air refuellers. For the Indian Navy, powers for replenishment of “Disaster Management Bricks” have been delegated to the command level in order to enable immediate response to Natural Disasters/HADR Operations. 


Clarifications or interpretation of provisions will be addressed by an Empowered Committee headed by AS&FA, Ministry of Defence with representatives of Department of Defence (DoD)/Department of Military Affairs (DMA).


In his introductory remarks, Financial Advisor (Defence Services), Sanjiv Mittal, expressed confidence that DFPDS 2021 will provide enhanced impetus towards ease of doing business right up to the grassroots level and enhance operational preparedness of the military. 


He added that DFPDS 2021 was a result of wide-ranging deliberations by the Services under the aegis of Department of Military Affairs and Department of Defence.


A system of oversight, disclosure and internal audit mechanism will be put in place by the administrative wing of DoD/DMA in consultation with MoD (Finance). 


Chief of Defence Staff General Bipin Rawat, Chief of Naval Staff Admiral Karambir Singh, Defence Secretary Dr Ajay Kumar and other senior civil and military officials of MoD were present on the occasion.




Highlights of DFPDS 2021:


·      Financial powers devolved to field formations; focus on operational preparedness; and promoting ease of doing business and jointness among the three services.


·      Competent Financial Authorities’ powers doubled; and increased up to 5-10 times in field formations in certain Schedules.


·      10% increase in “Delegated Financial Powers” of vice chiefs of the three services


·      Up to three times increase in Schedules related to indigenisation/research & development 


·      Enabling provision of Emergency Financial Powers to field formations below command level incorporated in Emergency Powers Schedule for immediate military necessities



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