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Budget brings much-needed cheer, new paradigm in defence R&D

Source : The Economic Times

Budget brings much-needed cheer, new paradigm in defence R&D
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This year’s budget has brought some much-needed cheer to defence research. The finance minister’s announcement that 25% of defence research funds would be earmarked for the private sector, startups and the academia is a long-awaited reform. This measure will be a shot in the arm for ‘Make in India’, raising innovation to unprecedented levels.

Defence research has always been dominated by the Defence Research and Development Organisation (DRDO). Its performance has been a mix of impressive achievements — as in strategic systems, missiles, anti-satellite systems and radars — and painfully languid progress in other areas. The most notable failure was the INSAS rifle which is not a hot favourite of the Indian Army. Till recently, even bullet-proof jackets and protective clothing were beyond its pale. The Kaveri aero-engine failed to reach soaring heights. India’s poor progress in developing special alloys and material crucial for aero-engines and advanced systems is a serious handicap. The Arjun tank was, at best, a clumsy effort which has not delivered full satisfaction to the Army. Cyber security is a headache to our security establishment.

India’s quest for defence self-reliance was never matched by a resolve to revamp research and development (R&D). But Parkinson’s law reigned supreme with public research facilities mushrooming and filling the space with little room for the private sector or the academia. The DRDO was never concerned about the quality of its scientists or the timelines of its research projects. Time-bound research projects are exceptions and open-ended projects plagued by time overruns sap the confidence of the Armed forces. There has been no serious effort to reform the DRDO. There was no inclination to learn from advanced countries like the USA where institutions like the Defence Advanced Research Project Agency (DARPA) funded the private sector liberally for defence projects with spectacular results. The departments of Space and Atomic Energy have reached out to the private sector for their development projects and reaped rich benefits.

The private sector remained on the fringes, engaged in ‘built-to-print’ projects which hardly involved technology transfer. There was no serious effort to associate the private sector in research or in enduring long-term manufacturing partnerships on a win-win format. The framework to involve the private sector in such partnerships did not exist. If an entrepreneur designed a new product there was no way the project could be incubated. The hands- off approach of the defence bureaucracy relegated the private industry to insignificance.

India’s ‘Aatmanirbhar’ programme in defence gained momentum after the government decided to ban the import of equipment and components numbering more than five hundred. The finance minister has announced that 68% of the defence capital budget would be earmarked for the domestic Industry. Such decisions are predicated on the assumption that technologies are available either with the DRDO or the private sector. If the DRDO fails to deliver, the ministry of defence will have to revert to imports. Given the uncertainties in timely delivery of projects there is every chance that achieving self-reliance will be hampered. Therefore, the government decision to involve the private sector and the academia in defence R&D comes as a breath of fresh air. How this will be rolled out will determine its success.

Lack of oversight by the Armed forces has been one of the reasons for DRDO’s lacklustre performance. It will be necessary for the DRDO to work in tandem with the three Armed forces. While outsourcing R&D, merit and efficiency alone have to be the criteria for selection of research partners. Institutions like the IITs will be the preferred partners of the defence ministry but equal consideration have to be given to private universities if they satisfy the criteria of merit and efficiency. There has to be a sound policy on Intellectual Property Rights. The private sector will need to be given the first right of refusal if the product developed through R&D is taken up for commercial production. Unless the industry has long-term stakes in any project, investments for the project may not be forthcoming. As for startups, the MoD’s Defence Innovation Organisation opens up huge opportunities for innovation but the success will depend on the efficiency of product development and commercialisation, the procedure for which will have to be simplified, giving opportunities for long-term partnerships.The finance minister’s announcement has to be backed by follow-up action. The government may do well to evaluate the DRDO’s performance, downsize its establishment, bring in world-class talent and introduce public-private partnerships in running some of its centres which are not critical. ‘Aatmanirbharta’ in defence will be a reality only if home-grown technologies crowd the market unleashing the animal spirits of the domestic defence industry.

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