Beyond the Rafale debate

One has heard of the story of five blind men trying to decipher and describe an elephant. Based on whatever body part they were holding, each one of them were correct in perceiving the particular body part to be the animal. However, it was far from truth! The corollary here is to draw parallels about the Rafale deal debate in Parliament last week. Hon'ble people's representatives were all correct in perceiving the deal with limited knowledge, but in totality, it did not produce the full truth, due to incorrect perception! Firstly, one is required to understand the offset policy of the Defence Ministry, Government of India. It is elaborately explained in the DPP (Defence Procurement Procedure) issued and updated by MoD from time to time. Whenever there is a contract given to an agency above 2000 crores, of rupees, 30 per cent of the total contract amount needs to be ploughed back to benefit inland companies. The mother company in receipt of the main contract is supposed to engage one or more Indian companies, thus offsetting 30 per cent of the total contract value to such inland companies for manufacturing parts or accessories required to fulfil the contractual obligation by the mother company in receipt of the original contract.

Secondly, pricing of an aircraft is a highly technical and complex issue. Merely reading a brief note on this subject may not be enough to fathom all the difficult, complex and cumbersome pricing policy paraphernalia. There are several factors involved in the pricing of a jet aircraft which is often supplied with requisite spares parts, equipment along with spare parts which also include life cycle spare parts required to maintain high serviceability of the fleet of aircraft being purchased. Life cycle spare parts are catered for long term serviceability of the fleet and are included in the inventory as small, medium and large - spare parts and components besides 'weaponry' which are additionally attached to the aircraft for its cutting edge lethality. In the parlance of inventory management, spares are categorised into A, B and C, while 'A' class spares are the most costly and fewer in number, class B spares are less costlier than 'A' class spares, but more in number, and the class C spares are maximum in number but relatively cheaper than both class A&B spares. While class A& B spares need high technological precision, class C spares are simpler to manufacture. Normally, the mother company in receipt of such big contact with offset policy to be enforced assigns class C and maybe few class B spares to be manufactured by the offset companies so chosen. The decision to allocate offset manufacturing to any inland company solely depends on the mother contractor company. Though, there is no embargo for them to consult the Ministry of Defence/Government, in this regard.

Without going into any pros and cons of what transpired in the free-for-all debate in Parliament, on the subject, it needs to be understood that the offset policy was actually designed to help the Indian entrepreneur and the aviation industry to grow and be self-reliant which would also reduce dependency on procurement from abroad and ultimately reduce outflow of foreign exchange from our coffers. Besides, the kind of message respected parliamentarians displayed/conveyed to the whole nation from the temple of democracy is best left aside and not commented upon. With no ethics and values for respect to each other, continuous hooting, jeering, sloganeering and rushing into well of the house on the slightest pretext, it depicted a dim view. Especially, detrimental to the school and college-going children, who often tend to emulate the hon'ble parliamentarians. God almighty may take note for good sense to prevail, so that the quality of debates are improved with more respectful conversation and exchange of words with due regard, in the temple of democracy in future.

Thirdly, the Hindustan Aeronautical Ltd. (HAL), has more or less remained as a white elephant rather than growing into an astute professional organisation in the past five decades. It is because of TINA (There Is No Alternative) factor that in the so far, the State has not managed to create any other organisation for whatever possible reasons, which could have produced spares, equipment for the IAF and the Aviation Industry and to compete with HAL. Thus, due to monopoly, HAL has been the beneficiary in the military aviation sector mainly from the IAF, but with a lackadaisical approach towards meeting deadlines & new initiatives. Anyone with experience in dealing with HAL, know well about the unending shifting of the final date of delivery of spare or items/equipment repaired or manufactured at various HAL branches across the country. At times the user (mainly the IAF) would be frustrated and often feel dejected with such unprofessional approach but with no other alternative to fall back, one has to lump & bear with it. The work culture in HAL is needed and must improve the overall scenario in the aviation sector mainly for the IAF- sentinels of the sky of our country. One is reminded of the endeavour of the then Defence Minister Pranab Mukherjee in 2004 during UPA-1, to revive and revitalise the HAL branch at Barrackpur, West Bengal. However, a person of his stature also could not make much of a dent in the demeanour of this huge Defence PSU, ultimately with no improvement in its Barrackpur Branch.

With such background history of these illustrious PSUs, it is immaterial whether one lack crore rupees worth of order or more is pumped into HAL, it actually does not help the IAF, or the Indian Aviation industry much. There is a huge backlog already existing in different HAL branches with several slippages in the delivery schedule. The Rafale offset, which can still be partly be assigned to HAL, would not help the main purpose of the policy to encourage entrepreneurship, if fully assigned to HAL, besides the perpetual threat of missing deadlines and delays would remain! One can only hope that at the end of the day it benefits the country from whatever deals are made. It should always be nation first! The country should work towards creating healthy manufacturing and encourage new young entrepreneurs for overall benefits of the industry as that would create several job opportunities too.

(The views expressed are strictly personal)