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Mainstream, Vol XLVII, No 32, July 25, 2009

Why Rs 1417030000000 won’t Save Us

Monday 27 July 2009, by T J S George


One followed by seven zeroes, a crore, is easy to conceptualise. It’s the unit in which politicians count their money. But one followed by twelve zeroes? It takes an Indian Budget to think in those terms—Rs 1417030000000 being the allocation for defence in the Mukherjee Budget. It’s 34 per cent higher than last year’s but it’s for our defence, so no one will grudge it.

That’s a pity because we must indeed grudge it. And precisely because it is for defence. Not that the money is too much. India spends only 2 per cent of its GDP on the military. Pakistan spends 5 per cent and China 7 per cent. But the problem is that, unlike them, we don’t get the full benefit of the money we earmark.

So the services remain seriously handicapped. The Army badly needs light helicopters and artillery guns, but has been “unable” to buy them. Half the submarine fleet is useless for war. IAF crashes in recent months have pointed to the need for urgent equipment upgradation. Even fast patrol boats the Coast Guard desperately requires are yet to be acquired.

Actually the services were given Rs 48,007 crores last year. But as much as Rs 7000 crores out of it remained unspent. The Coast Guard, for example, was given Rs 947 crores, but it returned Rs 200 crores unspent.

Why are they unable to buy what they want though they have the money? The lay mind will immediately think of the corruption that has plagued defence purchases for long years. Maybe because huge sums of money are involved, middlemen have become active in this field. Neither the law nor proverbially clean Defence Ministers seem able to get rid of the manipulations.

V.K.Krishna Menon had many failings but corruption was not one of them. Yet, he was caught in the jeep scandal. George Fernandes, not considered corrupt, was badly cornered by tehelka. The evidence of kickbacks was all on camera, yet the Defence Minister’s response was to destroy tehelka through foul means.

Rajiv Gandhi was still wearing the Mr Clean halo when the Bofors bomb exploded. The institution of middlemen had officially been abolished by then, but powerful middlemen pulled strings, from Italy and elsewhere. It’s entirely possible that Rajiv Gandhi knew about things only after things happened, but he evidently went along thereafter. Otherwise, the cover-up operation would not have been so effective and Ottavio Quattrocchi, a professional middleman, would not have received the sustained protection that he did.


The current Defence Minister is cleaner than any other Mr Clean before him. Nevertheless, middlemen remain. The Rs 10,000-crore missile contract with Israel earlier this year involved a 6 per cent “business charge”. Who got this? And why was the contract signed with a company that was already being investigated by the CBI?

Some answers came from the Israeli newspaper Haaretz. It revealed that the company gave large commissions to Sudhir Chowdhury to fix the deal. The CBI had issued an arrest warrant against this man over a 2006 missile deal and he had then moved his base to London. He is one of three middlemen who are said to control nearly 80 per cent of India’s defence procurement.

A gentleman like A.K.Antony would be unaware of such goings-on, let alone be party to them. But the innocence of leaders like him only helps the crooks who operate unseen. This ground reality adversely affects the quantity and quality of our military purchases and therefore of our capability to counter a hostile neighbour or an invading terrorist group. Unless this problem is addressed and solved, one followed by all the zeroes in the world won’t help us.

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