Throwing Good Money after Bad: Rewarding DRDO for Inefficiency

Throwing Good Money after Bad: Rewarding DRDO for Inefficiency

(FORCE Aug 14)

Major General Mrinal Suman

The budget presented on 10 July 14 has been called pedestrian, lackluster and devoid of any innovative initiative by different critics. Some have gone to the extent of describing it as a ‘budget-without-tears’, wherein a token allocation of Rs 100 crore has been made to each and every promise made in the party manifesto.  

However, one curious provision of the budget has escaped the attention of the most of the detractors. Quite unexpectedly, allocation to the Defence Research and Development Organisation (DRDO) has been hiked from the previous year’s Rs 10,610 crore to Rs 15,283 crore, thereby raising the share of DRDO from the earlier 5 percent to nearly 7 percent of the defence budget now.

Whereas the need for giving a fillip to indigenous R&D is unexceptionable, most experts wonder if the past track record of DRDO justifies such a massive hike. Even after spending thousands of crores of rupees on DRDO, the country has received no meaningful returns so far. Regrettably, DRDO has neither demonstrated any worthwhile achievement in the field of developing cutting edge technologies nor has it succeeded in building an innovative scientific environment in the country during the last six decades.  

Ask any soldier and he will tell you that DRDO is the biggest fraud being perpetrated on the nation and is responsible for the current ‘hollow state’ of the Indian armed forces. Despite its failure to develop even a single major weapon system, it stalls all imports. No procurements from abroad can be carried out unless DRDO concurs that the product cannot be produced/developed in the country in the required time frame; and DRDO is always wary of conceding this. Resultantly, the services are denied urgently required equipment and are forced to carry huge deficiencies for unacceptably long periods.

DRDO has come to be associated with false claims, tall promises, unexplained delays and sub-optimal products. There is hardly any other organisation in the country that has failed the nation so very appallingly. Incompetence of DRDO can be gauged from the fact that it has failed to develop a reliable small arm for the soldiers or a light-weight boat for assault river crossing. On the other hand, nearly thirty countries produce their own small arms and are ready to sell them to India. It is a matter of shame that India has to resort to imports.

Regrettably, DRDO does not believe in carrying out appraisal of its own performance. Instead it resorts to finding alibi for its poor performance. The deadly virus of self-delusion afflicts DRDO; making it complacent and resist reforms. Inertia to change is the biggest adversary of innovations and progressive thinking.

DRDO Symbolizes Gross Incompetence and Wastage of Resources

DRDO was formed in 1958 after the amalgamation of the then already functioning Technical Development Establishment of the Indian Army and the Directorate of Technical Development and Production with the Defence Science Organisation. The objective was to have a single unified agency to handle all defence research and development activities.

Over the years, DRDO has grown multi-directionally. With a network of more than 50 laboratories dealing with multiple disciplines, it employs over 5,000 scientists and about 25,000 other scientific, technical and supporting personnel.

Three major developments in the recent past have been of critical importance to DRDO. One, with the promulgation of Defence Procurement Procedure 2006, role of DRDO was reduced to the development of ‘strategic, complex and security sensitive’ systems. All other developmental projects were taken out of the purview of DRDO. With reduced mandate, a reduction in the bloated organisation of DRDO was expected. However, DRDO resisted it.

The second development was the setting up of a committee in February 2007 under the chairmanship of Dr P Rama Rao to carry out a thorough examination of structure and functioning of DRDO and suggest measures for its improvement. The committee submitted its report to the Ministry of Defence (MoD) in February 2008. In June 2009, a committee under the chairmanship of the Defence Secretary was tasked to study the committee report and arrive at a set of acceptable recommendations.

On the acceptance of the recommendations of the Defence Secretary, restructuring of DRDO was announced by MoD in mid-May 2010. Leaving aside token shedding of three laboratories, not a single measure suggested any radical reforms. On the contrary, the organisation has been made more top-heavy with the creation of seven new posts of Director Generals at the centres, formed by making clusters of laboratories based on functionalities and technology domain.

Worse, there is nothing in the approved restructuring plan to suggest that any thought has been given to improve R&D performance of the organisation. One can only marvel at the dexterity with which DRDO has made selective use of the recommendations of the Kelkar Committee and the Rama Rao Committee to convert an adversity into a blessing to create additional appointments and further its own organisational interests.

The third development relates to the revised defence offset policy announced on 02 August 2012. It allows acquisition of imported technologies in ‘areas of high technology’ by DRDO. Vendors are allowed to fulfill up to 30 percent of their offset obligations through this avenue.

Unfortunately, the policy is highly convoluted. The list of technologies provided by DRDO is vague and covers too vast a spectrum of sub-technologies, making it well nigh impossible for a vendor to submit definite technical and commercial offset offers for the fulfilment of obligations. He can never be sure that the technology on offer would be acceptable to DRDO. In addition, he will be ignorant of the likely cost and the applicable multiplier.

In case DRDO rejects the technology offer due to redundancy or the indicated cost, the vendor will have to rework his offset proposal afresh by identifying alternate programmes and routes to cover the shortfall resulting from such rejection/reduction. Consequently, the complete acquisition process will get delayed as technical evaluation cannot be commenced unless technical offset proposal is found to be fully compliant.

Reasons for Failure to Deliver

A study of the ‘pentad of developmental growth’ shows that DRDO is no R&D organisation. It functions at a pedestrian level. Its domain competence is limited to replicating imported products. The activity has been given interesting taxonomy of ‘reverse engineering’ or ‘indigenisation’. Resultantly, DRDO has acquired a highly derogatory acronym of ‘Defence Replication and Duplication Organisation’.

Illustration 1: Growth of Defence Industry: Pentad of Development

As shown in Illustration 1, the ‘pentad of developmental growth’ consists of five distinct but overlapping functions that contribute to technological advancement, i.e. improvisation, improvement, upgradation, innovation and invention.

Whereas improvisation entails use of an unplanned expedient for ‘make do’ arrangement, improvement signifies notable enhancement of performance in certain parameters. Upgradation indicates a quantum jump in the overall performance capability of equipment through the infusion of newer technologies. While improvisation and limited improvements are undertaken by the users, major improvements and upgradation are carried out by the production agencies.

Finally, innovation and invention imply application of original and creative ideas to produce equipment of newer genre. These are the functions of defence R&D. Mindful of its   incompetence to perform true R&D (innovation and invention) functions, DRDO has been delving in wasteful peripheral activities, thereby wasting the defence budget.

There are multiple reasons for the gross inefficiency that afflicts DRDO. However, the primary reason is its non-accountability to any external authority. No external performance audit is ever carried out to ascertain justification for the funds expended. In addition to heading DRDO, the Director General performs the duties of Secretary Defence R&D and also acts as the Scientific Advisor to the Defence Minister. Consequently, he sanctions projects, monitors them, accepts delays and even closes them. Escalation in costs and deferment of completion dates are taken for granted.

This lack of accountability has made DRDO complacent and smug, resulting in a total neglect of the services’ requirements and customer satisfaction. Over the years, DRDO has lost track of its raison d'être and started considering itself as an organisation that exists for itself and no one else. Forgetting that it has been constituted solely for developing systems for the armed forces, it has re-appropriated to itself the powers to determine the fields in which it should delve in. Resultantly, DRDO’s focus has shifted away from the defence requirements. Instead of producing state-of-the-art weapon systems, it has been spending time and resources in ridiculous activities like producing ‘Namkeen Herbal Tea’.

DRDO has also been suffering from the most detrimental malaise of bureaucratic dogmatism. It has become a typical government organisation with security of service. With assured career progression and a total absence of accountability, all functionaries are safe in the knowledge that they would never be called upon to justify their performance. This has emboldened them to mark time to earn pension and seek reemployment thereafter.

The main thrust of DRDO has been on empire-building and construction of facilities rather than developing a scientific temper. Whereas every DRDO establishment boasts of world-class auditoriums, convention centres, conference halls and hostels, R&D activities are limited to holding meaningless seminars and publishing glossy souvenirs. Mediocrity thrives due to proclivity for non-scientific activities.

Furthermore, the current practice of keeping all retired scientists on its rolls as advisors/experts blocks avenues for promising talent. Persons who contributed little during their active service life are allowed to subsist on the defence budget for years after their retirement as well.

Most interestingly, DRDO has mastered the art of survival through patronage and networking. Many consider DRDO to be the bankers to MoD. Due to the flexibility of its procedure, DRDO is in a position to oblige other wings of MoD by providing facilities from its sources. DRDO is often asked to bear expenditure for many events under the façade of becoming co-sponsors. To silence criticism from the armed forces, it has started dangling the carrot of post-retirement employment as adviser/consultant to senior service officers, especially the Vice Chiefs.

The catchphrase of ‘self-reliance’ is very cleverly exploited by DRDO to further its own agenda. At the DRDO Technology Day Awards function in May 2010, DRDO chief Dr V K Saraswat faulted the services for failing to support indigenous efforts. He stated, ''It must be understood that the responsibility for self-reliance should be shared by all stakeholders of MoD and cannot be placed on DRDO alone, which neither has the power to impose its products on its customer nor the mandate or capacity to produce the developed systems all by themselves.''

Dr Saraswat’s remarks deserve scrutiny as they reveal an interesting penchant for disowning all responsibility for failures. He expects the services to live with critical equipment gaps in the hope that one day DRDO would be able to develop them. In other words, the Army should have shown its support for ‘self reliance’ by continuing with T-55 tanks of 1960s vintage to date as MBT Arjun still remains under development. By the same logic, the Air Force should keep flying MIG-21 aircraft till the Light Combat Aircraft (LCA) becomes operational, and that may take another 10 years if the past track record is any indication. What a bizarre argument!

Need for Dynamic Reforms

DRDO has become a liability in its present form. There is an urgent need to carry out a thorough overhaul of its structure and functioning. A few cosmetic reforms will not do. That will amount to condoning inefficiency and continuing wasteful expenditure of the defence budget.

To start with, DRDO must be pruned down drastically. It must be forced to focus only on the mandated ‘development of strategic, complex and security sensitive systems’. All laboratories engaged in unrelated activities must be closed down and laboratories engaged in similar/overlapping activities should be amalgamated to exploit synergy of operations and save costs.

Equally importantly, DRDO must be made accountable for its performance. For systemic modernisation of the armed forces, there is a need to have a single overarching authority to oversee the complete gamut of activities related to the management of defence acquisitions, development of defence technologies and promotion of indigenous defence industrial capabilities. For that, it is recommended that a Defence and Aerospace Commission (DAC) be established as the nodal agency under the Ministry of Defence. DAC must have necessary expertise and be staffed accordingly.

As shown in Illustration 2, DRDO should be made accountable to DAC through the Defence R&D Wing. By means of regular monitoring, it should be ensured that DRDO concentrates on the development of critically required technologies and does not waste the allotted funds on irrelevant activities.   Additionally, DRDO must be held responsible for the claims that it makes. Certain failures and delays are inherent in all R&D works and must be accepted as acceptable risks. However, DRDO must not be allowed to get away with tall claims which it knows are totally outside the realm of possibility.

Illustration 2: Making DRDO Accountable

Every DRDO project must have an exit option. In case DRDO is unable to complete a project in the initially stated time frame, it could be given an extension of up to 50 percent of the initial period. Failure to complete the project during the extended time period should logically result in its termination and foreclosure. India can ill-afford to have projects like Kaveri Engine for LCA. It was scheduled to be ready by 31 December 1996 at a cost of Rs 383.81 crore. Whereas the expenditure has risen nearly ten-fold, success continues to elude DRDO. There are numerous other projects that can be cited. The suggested arrangement will also preclude indefinite denial of critically needed systems to the services.

It should be for DAC to set long and short term goals for DRDO, thereby forcing DRDO to re-orientate its disposition towards the achievement of scientific excellence rather than frittering away of time and resources on infructuous pursuits.

There should be lateral movement of talent between academia and DRDO at all levels. Security of government job should not be allowed to breed complacence. Non-performance must not be tolerated. Simultaneously, terms of employment should be made attractive enough to retain talent.

Close interaction with industry and academia should be institutionalised through the creation of standing bodies as regular interface, both through formal and informal contacts, is necessary for continuous exchange of views. Concurrently, MoD should facilitate greater interaction and collaboration with prime contractors, sub-contractors and SMEs for speedy evaluation of newer ideas and their optimum exploitation through appropriate adoption. 

An open architecture which allows ‘plug and play’ should be created to ensure seamless incorporation of evolving technologies for defence systems. Every innovator should be able to approach DRDO to share his ideas, howsoever radical they may appear at the outset. If considered exploitable after due appraisal, DRDO could refer the proposal to the concerned laboratory for evaluation and insertion. If required, the innovator could be provided all assistance to further develop and refine his idea to make it useable. To be able to establish such smooth interaction, major structural reorganisation of DRDO will be needed.

Finally

Two indicators show the utter failure of DRDO to create the necessary ecosystem for the promotion of defence innovations. One, India has come to acquire the ignominious status of being the largest importer of conventional weapons in the world. Two, as per the Global Innovation Index 2014 report, India occupies 76^th position in the world with 33.70 points.  More worrisome is the fact that it has slid by ten places during the last year. On the other hand, Israel owes its rise as a major exporter of defence equipment to its environment of innovative thinking. It ranks 15 with a score of 55.46 points.

Inability to deliver in the technological field has forced DRDO to acquire the traits and trappings of bureaucracy. Organisational parochialism of safeguarding turf reigns supreme and every suggestion for change is nipped in the bud.  Like bureaucrats, DRDO functionaries dread infusion of innovative ideas and techniques, lest their own incompetence to keep pace with progressive changes becomes obvious. Consequently, DRDO prefers to persevere in the comfort zone of status quo and abhors challenges that necessarily accompany every change.

DRDO has consumed thousands of crores of rupees over the last few decades without any worthwhile results. Therefore, shortage of funds cannot be touted as an excuse for non-performance. It is unlikely that the additional funds would be utilised for genuine R&D work. They will also disappear in the bottomless pit of inefficiency and ineptitude. If the past track is any indication, the additional bounty will be used by DRDO to enlarge its empire by raising some more auditoriums and guest houses. No wonder many question the wisdom of throwing good money after bad.

Some term DRDO as a white elephant – ‘a valuable but burdensome possession whose cost of upkeep is out of proportion to its usefulness or worth’. Others consider it to be beyond redemption and suggest it’s winding up. But that will be an imprudent step. Neither the massive infrastructure built over the years nor the technical pool gathered should be wasted.

As suggested above, DRDO needs to be prodded and forced to produce results. It can only be done by making it accountable to a high powered body like DAC. It is only then that an environment that stimulates and promotes research in defence technologies can be nurtured. Neglect of research means stagnation, languishment and decay.*****