So far, vice-chiefs of Army, Navy, and deputy chief of air staff were the competent financial authority for capital procurements of up to Rs 300 crore

New Delhi: The Union Cabinet Wednesday approved further delegation of financial powers under capital procurement that empowers command heads of the Army, the Air Force and the Navy to make expenses to the tune of Rs 100 crore at their own discretion.

A senior defence official said this move — which comes in the wake of emerging security challenges — marks the first time financial powers have been devolved below the vice-chief level for capital procurement of specified items. 

“This delegation of powers within service headquarters and up to command level for items of capital nature such as overhauls, refits, upgrades etc., will enhance the utility of existing assets and will facilitate faster processing and implementation of projects for modernisation of the armed forces to meet the security challenges of the nation,” the Union Ministry of Defence said in a statement.

According to the government statement, under the Other Capital Procurement Procedure (OCPP) of the Defence Acquisition Procedure-2020, the Deputy Chief of Army Staff (CD&S)/Master General Sustenance (MGS), Chief of Material (COM), Air Officer Maintenance (AOM), Deputy Chief Integrated Defence Staff (DCIDS), and Additional Director General Indian Coast Guard (ADG ICG) can take decisions on procurements and repairs of up to Rs 200 crore.

The limit is Rs 100 crore for the General Officer Commanding-in-Chief (GOC-in-C), Flag Officer Commanding-in-Chief (FOC-in-C), Air Officer Commanding-in-Chief (AOC-in-C) at Services Command, and Regional Commanders of the Indian Coast Guard (ICG).

So far, vice-chiefs of the Army, the Navy, and the Deputy Chief of Air Staff were the competent financial authority for capital procurements of up to Rs 300 crore. The new set-up is a sub-delegation of this, not an enhancement.

This is different from the emergency financial powers granted to the services for urgent necessities relating to military preparedness to meet eventualities such as war or war-like situation, or natural calamities.

Last year, amid the India-China face-off, the government gave emergency powers to the armed forces to procure weapons systems of up to Rs 300 crore on an urgent basis. The services were granted similar powers after the Balakot airstrikes in February 2019.

The essence of delegating these powers is to expedite the procurement/repair of equipment/items/material/stores, and provisioning of various services, during times of urgent requirement.

Officers of the three services say the latest decision will facilitate the ease of doing business by aiding faster capital procurement at a time when India is working on modernising its armed forces.

‘Step In Right Direction’ 

A senior Army officer said the delegation of financial powers will speed up the procurement process primarily because the chain for processing of approvals will shorten.

“Secondly, procurement at command level is a better option to purchase theatre specific equipment, while central procurement is more appropriate for common equipment,” the officer added.

The officer said smaller-sized contracts will prove more viable for smaller vendors who may not have the capacity to handle large contracts at the services level, and will boost Atmanirbhar Bharat, the Modi government’s campaign to boost domestic manufacturing.

A senior Navy officer said that while the quantum of funds available had gone up over the years, the power of spending had not.

“The enhanced financial powers will enable senior officers of the services to take fewer sanctions to buy a higher quantity,” the officer added.

Citing the Navy Chief of Material (COM) as an example, the officer said, “The COM is a principal staff officer for procurement of spares and logistics of the Navy. By enhancing his powers, he will not need to go back to his higher authorities for financial clearances for cases which now lie within his own financial powers.”

“This will save voluminous paperwork and thus delays,” the officer added.

An IAF officer said timely procurement has a strategic impact on operational effectiveness since “modern aerial warfare is driven by technology and any delay can have a cascading effect on the potency of the force”.

“The decision is in the right direction and will cut down time from initial proposal to final procurement,” the officer added.

More Financial Powers

The Cabinet decision also enables the Chief of Integrated Defence Staff to the Chairman Chiefs of Staff Committee, Vice-Chief of Army Staff, Vice-Chief of Naval Staff, Deputy Chief of Air Staff, and the Director General of Coast Guard to sanction government support of up to Rs 50 crore for prototype development — a move that could be seen as a bid to boost India’s self-reliance in defence.

According to the defence ministry statement, financial powers have also been enhanced for other competent authorities under ‘Make-I’ in line with the government’s vision of Atmanirbhar Bharat and Make in India for a robust defence industrial ecosystem.

Projects under the Defence Procurement Procedure’s Make-I category involve government funding of 90 per cent, released in a phased manner and based on the progress of a scheme, under terms agreed between the defence ministry and the vendor.