The media has been lapping up some half truths ostensibly sourced from an audit report circulated within the defence ministry. It is a matter of concern that file notings/reports are finding their way to the media even without a RTI application.
The system of procurement by the ministry or through recently delegated powers to service headquarters has to be well understood before statements accusing generals of corruption are made.
Having reduced the office of service headquarters to attached office status (notionally designated the Integrated Headquarters), the defence ministry retained all control of financial powers. The chiefs did not enjoy delegated financial powers to even manage day-to-day revenue expenditure, leave alone capital expenditure to acquire assets.
The navy was the first to suggest, discuss and get sanctions for a New Management Strategy (NMS), commencing 1991.
The intention was to address the first concern of unacceptable level of operational availability of ships and submarines. Delegated financial powers to the chief to expedite decision-making led to achieving much higher readiness levels. Under the earlier dispensation, ships needing urgent or routine repairs and maintenance languished while the defence ministry and finance wing raised objections on modalities.
It was not without years of discussion that the delegated powers with all the checks and balances were issued as Navy Instructions, thus making the chief responsible for running the navy through revenue budget delegation. Later, these powers were grudgingly enhanced with more restrictions but were limited to the revenue expenditure.
The delegated powers for capital expenditure were progressively enhanced to Rs.50 crore from 2004. It is now proposed to go up to Rs.100 crore. Given that the annual defence budget has exceeded Rs.1 lakh crore, every committee appointed by the government has forcefully sought delegation of adequate powers to the armed forces so that they are made responsible and accountable to maintain optimum readiness levels.
Since the navy had initiated, documented and steered a successful pilot project, delegation of powers for other services progressed on this model. The ministry ensured that at no stage was it possible for the military authority, irrespective of rank, to sanction any expenditure without the concurrence of Integrated Financial Advisor (IFA), barring for petty items of limited value.
These officers were drawn from the Department of Defence Accounts. Needless to say, the necessity to place so many of them as advisors led to an avalanche of vacancies for promotion to this specific cadre.
The major weakness in the system is the mindset of the IFA. Instead of assuming the role of an advisor, the IFA acts as an auditor for pre-acquisition formalities, the post event audit notwithstanding. Moreover, there are not enough officers of the right seniority and experience to fill these increasing billets.
No operational commander would overrule the objections raised by IFA since the latter forms an integral part of every step of procurement under delegated powers. It is ironical that the auditors who carry out post-audit are from the same cadre as those fulfilling IFA functions. Hence we have not heard of a single query questioning the IFA if the procurement process was faulty.
The orders for delegation of powers do not empower the field commander to review the performance of an IFA, whose final reviewing authority is the CGDA (Controller General Defence Accounts). If there is a conflict of interest between the delegated authority and the financial advisor, the matter is referred to New Delhi. If there is a faulty acquisition in procedural terms, the IFA is a party to it. Hence, any post-audit of the process should first seek an explanation from the IFA.
There have been extraordinary delays in equipping the armed forces with platforms, equipment, ammunition and ordnance due to the convoluted procedures of defence procurement. The cumulative shortages are so severe that most commanders with limited powers of procurement opt for a small number of critical operational necessities.
Bullet-proof vests are a case in point. Should a soldier continue to sacrifice his life because there is protracted discussions on file between the attached office and the defence ministry? Most field commanders would seek to provide what they can with what they have. The IFA knows this, and hence he is required to advise and prevent procedural violations.
If violations are indeed discovered later, by an auditor who has neither the knowledge nor the responsibility to prevent loss of life, should it not be the responsibility of the IFA to explain such procurement? Lastly, most such observations by the auditor are settled after explanations are obtained as per procedures. In the meanwhile, imagine the damage done by innuendos and television debates placing the blame on field commanders.
(Vice Admiral Suresh Bangara is a former head of Southern Naval Command. He can be contacted at scsbangara@hotmail.com)
