Empowering DIPP – or weakening defence?


Considerable confusion prevails about whether the proposed Defence Procurement Organization (DPO), as a follow up to the Dr Pritam Singh Committee recommendations, is to be ‘all encompassing’ in matters of defence procurement, which it actually should be. But this confusion appears to have been compounded through a recent notification (Notification S.O. 1636 (E) dated 19.05.2017 of Ministry of Home Affairs) vide which the power to issue licenses for the manufacture in respect of defence items included in the Schedule have been delegated to the Secretary, Department of Industrial Policy and Promotion (DIPP). The reference to ‘defence items’ in the Schedule include procurements / sales of arms and ammunition. So, are we looking at a lopsided arrangement of the DPO tasked with defence acquisition policy as well as defence industrial development, facilitation and promotion, but dependent on DIPP for issuing licenses for defence items? But this is just a small part of the web of red tapes.

What is much more significant is to examine what other then perhaps some small arms is the commonality of arms and ammunition between the Armed Forces and police forces in terms of arms and ammunition, even as unlike any other country police forces wear the same badges of ranks and even the same combat dress as the military? Is this move simply a gaffe at the bureaucratic level within the MHA or is this for turning India into a police state? We do not even have the sense to put our entire land borders under the MoD. But, surely there are no plans to equip our police forces with fighter aircraft, attack helicopters, tanks, armoured personnel carriers, destroyers, submarines, missile regiments and the like? With all the right gusto about ‘Make in India’ in the defence sector, will MoD be dependent upon MHA (DIPP) for issue of licenses for defence items? Common sense would say this is a foolish move unless the whole exercise is simply to take control of the ‘under the table’ formalities and negotiations during the process of issuing licenses. It certainly is going in reverse to the dire need of facilitating ‘ease of businesses’ and cutting down precious time. Under the abovementioned MHA notification, the powers and functions delegated to Secretary, DIPP are the ones that are exercisable by the MHA under the following provisions of the MHA-administered Arms Act, 1959: sub-section (1) of section 5 (dealing with licenses for manufacture, sale, etc. of arms and ammunition), clauses (b) and (c); section 7 (dealing with prohibition of acquisition or possession, or of manufacture or sale, of prohibited arms or prohibited ammunition); and, Chapter III (containing provisions relating to licenses).

Where the MHA has gone wrong, by design or default, is the addition that the delegated powers are to be exercised in respect of the category of arms and ammunition and defence items specified in the schedule that forms a part of the notification. However, the items mentioned in this schedule are actually defence items that were notified by the DIPP (vide Press Note 3 of 2014 series) ‘only’ to provide clarification about the defence items that require industrial licence under the provisions of the DIPP-administered Industrial (Development and Regulation) Act, 1951. What is the logic for the MHA controlling the defence industry when it is neither concerned with external defence, not charged with control over the defence industry, and not linked to industrial development? Just because some arms and ammunition happen to be common in the MHA-administered Arms Act, 1959 and DIPP-administered Industrial (Development and Regulation) Act, 1951, there is no reason to disturb the status quo – let MoD deal with defence items. The confusion apparently was quietly created (by design?) through the DIPP Press Note 3 notified in 2014 that industrial license is required to be obtained for the manufacture of defence items.

The MHA notification of 19 May 2017, instead of resolving the faux passé has compounded the folly. While there is no clear advantage of giving an overarching role to the MHA with regard to formulation of policy or grant of industrial license for manufacture or export of defence items, it is actually retrograde step by complicating and lengthening the process; thereby contributing to indirectly weakening defence. Now the question is given the attitude of the bureaucracy, will MHA retract and rectify its May 19 notification at all, how much time will it take to do so, or will it let confusion prevail?