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The tussle between Defence Public Sector Undertakings (DPSUs) and the Indian Armed Forces

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Naman Shukla
Naman Shukla
Naman Shukla is a Corporate and Financial law post-graduate from O. P. Jindal Global University, Haryana. He is currently working as an Assistant Professor of Law at IFIM Law School, Bangalore. He has his law graduation in B.A.LL.B. (Hons.) from the School of Law, Fair Field Institute of Management and Technology, New Delhi affiliated to Guru Gobind Singh Indraprastha University (GGISPU) New Delhi.

Introduction

The security and economic growth of India are both greatly influenced by the defence industry there. The Indian Armed Forces receive their defence supplies through government-owned firms known as the Defence Public Sector Undertakings (DPSUs).

The Indian Armed Forces must have the tools and know-how to protect the nation’s borders, and that responsibility falls to these DPSUs. But there have been several instances of conflict between the DPSUs and the Indian Armed Forces over the years. The causes of these disputes, how they affect the nation’s defensive capabilities, and potential solutions will all be covered in this article.

Reasons for tussles between DPSUs and the Indian Armed Forces

  1. Lack of coordination: The inability of the two organisations to work together effectively is one of the main causes of conflicts between DPSUs and the Indian Armed Forces. The DPSUs frequently fail to consider the unique needs of the Armed Forces while developing and producing equipment. As a result, there may be equipment that is inappropriate for the unique requirements of the Armed Forces.
  2. Equipment supply delays : are another factor in disputes between DPSUs and the Indian Armed Forces. Due to bureaucratic red tape, a lack of funding, and other administrative challenges, the DPSUs frequently experience delays in the production and delivery of equipment. This may leave the Indian Armed Forces unprepared to deal with threats from outside forces.
  3. Problems with quality: There have been multiple examples of DPSUs-produced equipment being of poor quality. In certain instances, the machinery has even failed, endangering the lives of soldiers. The Indian Armed Forces and the DPSUs no longer trust each other as a result of this.
  4. Cost overruns: The DPSUs are frequently held accountable for cost overruns in the production of defense-related goods. The result has been that the Indian Armed Forces have been forced to pay high amounts for subpar equipment. This has put pressure on the defence budget and affected how well-prepared the nation is for defence.

Reports from the CAG and other governments

The audit of the government’s and its entities’ financial records is the responsibility of India’s Comptroller and Auditor General (CAG). Over the years, the CAG has published a number of reports highlighting the problems faced by the DPSUs and the Indian Armed Forces. among the important CAG reports are:

  1. Report on Defence Production (Report on Defence Production (CAG Report No. 20 of 2015): In 2015, the CAG published a report on Defence Production that outlined a number of problems the DPSUs were experiencing. According to the study, the DPSUs were dealing with quality problems, cost overruns, and delays in the delivery of equipment. The study also emphasised the need for the DPSUs to increase production and efficiency.
  2.  Army Aviation Corps Performance Audit (Performance Audit of Army Aviation Corps (CAG Report No. 15 of 2019): In 2019, the CAG published a report on the Army Aviation Corps Performance Audit. According to the study, the Army Aviation Corps’ operational readiness was hampered by a scarcity of helicopters. The research also emphasised how important it is for DPSUs to increase their efficiency while producing helicopters.
  • Report on the Performance of the Defence Public Sector Undertakings (Report on Performance of Defence Public Sector Undertakings (CAG Report No. 14 of 2020): The CAG published a report on the 2020 performance of the Defence Public Sector Undertakings. According to the study, the DPSUs were dealing with quality problems, cost overruns, and delays in the delivery of equipment. The study also emphasised the need for the DPSUs to increase production and efficiency.

Actions to end the scuffles

1. Increase coordination: To guarantee that the equipment being built fulfils the unique demands of the Armed Forces, the DPSUs and the Indian Armed Forces must collaborate. Better coordination and communication between the two entities are necessary for this.

2. Increase productivity: To guarantee that equipment is produced and delivered on time, the DPSUs must increase their production and efficiency. Adopting contemporary manufacturing methods and procedures is necessary for this.

3.Raise quality: The DPSUs must concentrate on raising the standard of the machinery they produce. This calls for the employment of cutting-edge technology and the adoption of strict quality control techniques.

4.Increasing accountability is necessary in order to hold the DPSUs responsible for equipment delivery delays, cost overruns, and quality problems. Adopting a transparent and responsible system of production and sourcing is necessary for this.

Conclusion

The conflict between the DPSUs and the Indian Armed Forces is concerning because it affects how well-prepared the nation is for defence. To tackle these challenges and guarantee that the nation’s military equipment is of the greatest quality and delivered on time, cooperation between the DPSUs and the Indian Armed Forces is imperative.

To promote coordination, efficiency, and accountability, all stakeholders—including the government, the DPSUs, and the Indian Armed Forces—need to work together. Only then will India’s military sector be able to play a significant part in safeguarding the nation’s security and economic growth.

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Naman Shukla
Naman Shukla
Naman Shukla is a Corporate and Financial law post-graduate from O. P. Jindal Global University, Haryana. He is currently working as an Assistant Professor of Law at IFIM Law School, Bangalore. He has his law graduation in B.A.LL.B. (Hons.) from the School of Law, Fair Field Institute of Management and Technology, New Delhi affiliated to Guru Gobind Singh Indraprastha University (GGISPU) New Delhi.
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