25 January, 2021

Curse Of The Light Purse

A massive pension, pay and allowances bill has eaten horribly into the armed forces’ war-fighting ability and crucial modernisation

One Of The Few Good Things
A Swathi weapon locating radar at the Republic Day parade
Curse Of The Light Purse

In the March 2001 edition of the Harvard Business Review, Paul Levy describes the management lessons learnt from the operations of a sewage treatment plant at Nut Island, close to Boston, where a professional team ran it for 30 years. “They were every manager’s dream team. They performed difficult, dirty, dangerous work without complaint, put in thousands of hours of unpaid overtime, and they even dipped into their own pockets to buy spare parts.... (And) yet, in one six-month period in 1982…they released 3.7 billion gallons of raw sewage into the harbour. Other routine procedures to keep the harbour clean, such as dumping massive amounts of chlorine into otherwise untreated sewage, worsened its alr­eady dreadful water quality”. In short, management indifference to growing concerns within an organisation leads to teams having to look inward for soluti­ons. Such short-term solutions create major problems, spiralling into a full-blown crisis. The budget constraints in the armed forces give us a perfect analogue—only, on a much larger scale.

Pundits have been warning for years that less than 3 per cent of GDP towards defence cannot boost our preparedness to meet external threats. But the only thing we hear of is a perpetual state of penury—and the slew of measures through which the forces exercise thrift. The ‘Demands For Grants Analysis 20-21’ reflects the general decline of defence expenditure as a percentage of GDP over the last 10 years. But there’s also a troubling skew within that. Pay & allowances and pension components increasingly form a larger part of the expenditure pie, leaching away vital funds from capital needs. The army has seen its capital exp­enditure share drop from “26 per cent in 2007-08 to 18 per cent in 2020-21”. Pay & Allowances “account for 70 per cent of its total revenue expenditure and 57 per cent of the total budget”. Seen against the dire need for modernisation, that’s a pincer squeeze. India faces an unpredictable dynamic on its borders, and we as a nation may have occasion to rue this if we need to fall back on those brave words—“We shall fight with whatever we have”—that an army chief had mouthed two decades ago.

The counter-argument that defence cannot remain insulated from the nat­ion’s other critical concerns—and therefore has to accept res­ource constra­ints—plunges us into iterations of the ‘butter versus gun’ deb­ate. Goebbels and the truth aren’t easy cohabitants but we could take his truism—“One cannot shoot with butter”—at face value. What does the Indian government do?

The Battlefield Management System, shelved due to the budget squeeze, could have given the army an edge.

In the corporate world, a CFO may trim travel down to economy class in a tight year. But then, to quote Churchill from 1904, “The army is not like a limited liability company, to be reconstructed, remodelled, liquidated and refloa­ted from week to week as the money market fluctuates...” The counter-view came from Lord Haldane, Britain’s war minister: “If money is tight and the cost of a modern army enormous...why spend so much on pretty uniforms and no less than £15 million on bands?” See how that syncs with the recent internal review of existing practices by the Indian army—and its acceptance for the need in reduction in ceremonials.

However, if, together with pay & allowances, pensions constitute 61 per cent of the MoD’s 2020-21 budget, you can’t overstate the severity of the problem. But would that warrant the controversial solution in the air: increasing the retirement age?

No, says an anguished chorus from serving and retired officers. Such a solution “could deb­ilitate the effectiveness of India’s military inst­rument....”, Lt Gen Prakash Menon (retd) wrote on the chief of defence staff’s proposal. Various officers highlighted the extreme short-­sightedness and potentially counter-productive nature of this proposal—the collective naysaying included a hard-hitting article by serving officers in Mission Victory India. A leaked ‘briefing note’ from naval HQ added to the combustible mix, highlighting for instance, gaps in another recommendation—pay-outs of varying fractions of the stipulated pension if an officer seeks premature retirement at any stage after age 41 (when no other career prospects remain). These officers would naturally stay back.

Add up the negatives: you increase the population of an aging, demotivated management layer. You also end up paying full salaries for the next 16 years! This quick fix clearly rests on a grievously flawed logic.

But procrastination is not an option. The pension bill is by now directly aff­ecting defence modernisation. L.K. Behera and Vinay Kaushal, researchers at MP-IDSA, observe that “…the fast rise in pension expenditure has a significant crowding out effect on stores and modernisation, two major components that determine a nation’s war-fighting ability”. The 2020-21 budget estimates peg the individual outlays thus—stores: 6 per cent; capital procurement: 19 per cent; pensions: 28 per cent; pay & allowances: 33 per cent. In a scathing article in Jan 2019, Air Marshal M. Matheswaran (retd) wrote, “In October 2017, the chief of the army staff indicated the scrapping of a major modernisation programme, the Battlefield Manage­ment System (BMS)….” He then went on to elaborate how “precarious” the position in respect of equipment and weapons was...“68 per cent of its equipment is vintage, only 24 per cent is of current technology, and eight per cent is fit to be displayed as museum pieces. So much for the army’s combat capability; the air force and navy would fare no better”.

Thirty years back, the US military saw the need to integrate IT into modern war and put it into action.

So what was this esoteric BMS project that was shelved? It’s a ‘Make in India’ initiative whose cradle-to-grave story—unfolding over 10-12 years—takes us to the heart of the military modernisation imbroglio. Over three decades ago, the US military had begun visualising the need for integrating IT advancements into the battlefield canvas. A thesis published in March 1987—two years before Tim Berners-Lee invented the World Wide Web—shows how thinktanks there were planning to stay ahead of the curve. They saw that survivability in modern-day warfare demanded “command, control and communications (C3)” actuated on computer networks. BMS was to “provide the integrating tool” for this automated level of operations that would change warfare. Shades of these were seen in action in the Persian Gulf war of 1991. Remember, Linux is still in the prenatal ward, the Intel 486 SX Processor is just out, Windows for Workgroups is two years away.

Yes, there were glitches—including with a nascent GPS that had to operate with far fewer satellites than was needed. Issues dogged the US military even through the 2003 war. “Downloads took hours. Software locked up. And the enemy was sometimes difficult to see in the first place...The [First Marine] Division found the enemy by running into them, much as forces have done since the beginning of warfare.” But none of these ‘failures’ dissuaded them from further research. There was another vital lesson there: the assessment that IT adv­ancements in the corporate sector could be leveraged by the military. A 1998 paper co-authored by a vice admiral and a former air force officer in a US naval journal looked at the changes successful businesses brought about by leveraging technology and actually cited key takeaways from Walmart! This ability to assess an environment outside the military context—and the willingness to apply cross-industry learnings—requires an enlightened, innovative leadership.

Most modern armies were following suit. The preparatory work for India’s BMS started in the early 2000s. Lt Gen P.C. Katoch (retd), who has written extensively on the subject, states: “Post est­ablishment of the Directorate General of Information System (DGIS) in 2004, the army’s Tactical Command, Control, Communications and Information (Tac C³I) system was taken up, of which the BMS was one component….” Its main purpose was to integrate resources, “bringing them to the right place, at the right time, with right lethality to provide real-­time, appropriate, common comprehensive tactical picture....”

But as 2020 winds down with still more disquieting news from the China border, we look at a system that could have provided the army a much needed edge—and sacrificed in a fit of misguided thrift.

Be it an ill-considered pension proposal or premature shelving of a critical modernisation project—both as a result of budget squeeze—they indicate that the undesirable Nut Island Effect may have begun to kick in.

(Views are personal)

The author, a software consultant, is a former Indian naval officer.

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