Modernising Armed Forces on Contracting Budgets

By Lt Gen PR Shankar (Retd)


Smell the Anasthesia

As per Economic Times, the outlay for defence in the budget has been hiked by 5.8 per cent over the last year’s budget outlay. It is an increase of 1.9 per cent over the revised estimates. In actual or real inflated adjusted terms, it is a contraction. ‘It is one of the least allocations since 60s’. ‘In an environment of growing threat from our adversaries, this is grossly insufficient’. ‘We need more for our five trillion dollar economy’. This is what all defence analysts, veterans, and media will say as part of their analysis tomorrow onward. already there is such an article in Financial express. The Services will cry from hell to high water. They will however continue to face smaller outlays. They must reinvent themselves to do more with less as per a well thought out plan. If the defence outlay is not even part of the Finance Ministers budget speech for two consecutive years, you should know where you stand. If the Indian economy is in an ICU as many experts say, then the Defence Services are under a knife on an operating table. Time to smell the anesthesia and brace for the knife.

The Double Whammy

It is evident that the country cannot afford what we are aspiring for. We, of the defence establishment, must realise the limitations of our nation and its priorities. Time to flip the record. Hear a different tune. When I wrote on Modernising on Tight Defence Budgets, the response was lukewarm. Very understandable. Defence Budgets are boring. I was a doomsday predictor. My suggestions were unpalatable. Well the wolf has come into Red Riding Hood’s little hut. It will not go away. I do hope some one will listen to me now and at least look at my suggestions. The Government is not listening to the Armed Forces. So Armed Forces must seriously think of doing something different in case they want to modernise. We will do well to remember that this contracting defence budget must cater for modernising in conventional domains as well as the new technology domains like Cyber, AI, Robotics, Unmanned Systems, space and so on; which are costly in their own way. It is a double whammy.

Measures Suggested Earlier

In my previous article I had suggested measures like Import Substitution in Revenue Procurement, Reverse Engineering, ensuring high standards of Quality of production, Upgradation of equipment rather than new stuff, Cost Analysis to keep the costs down, an Operational Relook so that there is realism in what we are going to contend with, Lateral Induction into/out of CPMF, Capital Procurement Prioritisation so that key items are procured smoothly and Bureaucratic Integration of Services with the MoD. I would recommend that these points be seen again in the sobering atmosphere of a smaller purse. In this article I am adding a few more points for consideration.

Manpower Reduction

There is no alternative to manpower reduction. My short point is have a hard look at operational requirements jointly now that the CDS is here. Define a joint threat which the nation must contend with. Structure forces accordingly. Also let us be clear, we can have ‘Boots on the Ground’ or a technology driven force. Not both and not anymore. We are cutting our tail. That’s good. Time to cut some unwanted teeth and cull some holy cows of defence. Slowly but steadily, Infantry has become the latest holy cow, not to be touched. Not to be discussed. It is my sincere opinion that we have too much Infantry which is not consistent to reality. Even when the Mountain Strike Corps was sanctioned it was known within informed circles that it was unaffordable. The same task could be carried out differently through double tasking. I have outlined some ideas in another article @. Hence the CDS and Service Chiefs must take a reality check on manpower issues and reduce standing Infantry in some form or the other. Some suggestions are outlined below: –

TA-isation. What is the necessity of holding all Infantry Battalions at full strength all the time? is there a case for having a larger number of Infantry Battalions as Territorial Army Units, which can be embodied only periodically or when in field areas? That will cut manpower drastically.

RR Battalions. There is no doubt that the RR Battalions have been a great asset to the nation. However, things have changed in J&K after the abrogation of Article 370. Even the new COAS has said so. Since the issues in J&K have changed, is there a case for transferring RR Battalions to the Home Ministry and follow the Assam Rifles Model? The Assam Rifles Model has worked well for so long. There will be resistance to this line of thought and that resistance will be “Empirical” in nature.

Armed Forces- CPMF Interchange. A very fundamental way of reducing the cost of manpower is either to sidestep manpower from or into CPMF. At the time of Independence this was a norm. Today it is considered a NON-STARTER. However, the opportunity opens after this budget again. If Project UDAN is to take off and 100 airports are to come up, why cannot the CISF, CRPF and others be mandated by law to take only personnel from the Armed Forces for airport and other security duties? After all there will be a requirement of additional Security for these assets. Let us take the argument further, if the Government of India can pass an Act and law like CAA which gives citizenship to foreigners and enforce it, why cannot they pass a law to sidestep Armed Forces personnel who defend the nation, into CPMF, especially when there is an impending expansion? It is a matter of breaking down some walls and Unholy Cows.

Indigenisation Indigenisation and Indigenisation

Indigenisation is the only major mantra to do more with less moolah. Despite the clarion call of Make in India and everyone parroting it at every opportunity, our big-ticket items are still foreign. PSUs, OFB and DRDO have not come up to the mark in indigenisation for many reasons. With disruptive technologies making a Disruptive Impact on Military Affairs this issue will only get worse. The Armed Forces must do things differently to imbibe next gen technologies and make things cheaper for themselves. More of the same is no more an option. Change the direction of attack. Here are some options for consideration.

Defence Cells in IITs/ NITs. Our academic institutions are bubbling with ideas. We have not been able to tap them. The Services treat them like they are an extension of DRDO or OFB. Microsoft, IBM and Amazon treat them like royalty. No guesses as which way the talent will flow. Further, in my three years at IIT Madras, I am yet to see a senior IAF officer engage with the Institute. At this rate we will go nowhere. Unless the defence establishment sets up empowered cells in IITs/ NITs things will not change. It is a well-known fact that ISRO launches satellites at cheapest costs. However, the not so well-known fact is that IIT alumni have contributed significantly to ISROs success. The RM, CDS and Def Secy will do well to see what ISRO does which MoD does not. There has to be a framework for interaction with IITs. ()

Retired Intelligentsia. Some of our retired officers can do wonders for our establishment. However, veterans are treated with suspicion by the serving defence establishment. Is there a case to educate and sidestep retired officers into the defence industry? It must be done as a programme. Such thinking is alien to our system. Time to change.

Iran Model. Iran has been under sanctions. It does not import more than eight million dollars’ worth of defence equipment. The rest is indigenous. The key technologies and products which they employ in battle are totally indigenous. They do not have great capabilities. However, with what they have created a sense of dread in the minds of their adversaries in the area. What are they doing right? we could learn from them. ()

Foreign Buys and Indian Spares. It is understood that we must continue to procure from abroad in certain cases. Even in such cases, we can insist that all spares will be Made in India. This can be enforced through offset agreements and maintenance ToTs. There must be a review of all cases which are not yet contracted. Enforce the condition that spares will from India only. We will beat the trap of foreign sellers selling low and milking us high and dry on spares for a long time into the future.


There is lot of hope that the CDS will bring in Jointness. The bigger hope will be to see how he can motivate Services to maintain common inventories, use common logistics, use common communications, use common training facilities, use common infrastructure and so on. If these tasks which are revenue oriented are taken up seriously, there will be a lot of cost saving. In my assessment, the focus must be on Revenue expenditure optimisation.


I think the Services must increase their technical knowledge manifold. The idea is not to replace the engineer or scientist but to guide him in a language he understands so that he must do the right things for us. Similarly, there must be focus on Knowledge of procurement – both Revenue and Capital. Very funnily, almost everyone in the procurement chain is a fresh-faced journeyman with very little knowledge of what he is doing. As a result, cases get mishandled and capability lags.()

Time is Money

It is well known fact that time is a resource which costs money. In most of our procurement cases, there is always a delay. Cases get stuck. They get queued up. They are put on back burners. As a result, we end up paying much more than we should. This is because of two factors. The MoD is not well integrated with the Services. Secondly there is an utter lack of monitoring of cases or accountability in the system. Consciousness of time if inculcated will pay handsome dividends.

Reinforcing Failure or Creating Success

Very early in my career I learnt that doing the same thing again and again without a positive result is reinforcing failure. Our procurement and capability building system has reached a point where it is only reinforcing failure. We need to do things differently. We need to do things jointly. We need to be realistic about our dreams. We need to cut our cloth pragmatically. We need to create success with what we have.