Tuesday, 27 March 2012

India’s latest scandal: defence

March 26, 2012


India is no stranger to corruption allegations when it comes to defence – see, for example, the 1980s Bofors scandal.

But on Monday, the army chief, General VK Singh , told The Hindu newspaper that he was shocked when, two years ago, he was offered a $2.73m bribe to approve the purchase of 600 “sub-standard vehicles”, though he did not give the name of the defence lobbyist, an ex-army officer, who made the offer, or of the company allegedly involved.

He said the vehicles, 7,000 of which were already in use in the Army, had been sold over the years at exorbitant prices with no questions asked. He said there was no proper facility where they could be serviced and maintained and yet they continued to be sold to the Army.

 “Just imagine, one of these men had the gumption to walk up to me and tell me that if I cleared the tranche, he would give me [$2.73m],” Singh said. “He was offering a bribe to me, to the Army Chief. He told me that people had taken money before me and they will take money after me.

“I was shocked. If somebody comes and tells you, you will get so much, what can you do?”

India’s defence budget has grown in recent years – to nearly $38bn for the fiscal year beginning in April. As it works to replace its ageing military hardware, India has now become the world’s biggest arms importer, replacing neighbour China in the top slot.

The main beneficiary of India’s military largesse is the same as it has long been: Russia.

According to a study released this month by the Stockholm International Peace Research Institute, titled “Trends in international arms transfers, 2011”, India accounted for 10 per cent of the world’s total arms imports between 2007 and 2011, beating out South Korea at 6 per cent, Pakistan and China at 5 per cent each and Singapore at 4 per cent.

India buys the vast majority – 80 per cent – of its arms from Russia. It is replacing Russian aircraft that largely date from the 1970s – including 120 new Su-30MK fighter planes from Sukhoi Aviation Corp and 16 new MiG-29K fighter planes from Mikoyan.

China’s $100bn annual defence budget dwarfs India’s latest $38bn budget, but it has managed to decrease its imports by developing a domestic defence industry – something India has yet to achieve on any scale – which exports to India’s other neighbour, Pakistan.

If the government remains unable to develop an Indian arms industry, contracts will continue to go to Russia, though they have lately been moving to the Westfor example with the $20bn order for 126 fighter planes from France’s Rafale earlier this year.

The government’s projected defence expenditure is planned to grow more than 17 per cent for the fiscal year beginning in April – and for most, hearing that some of that $38bn was being misused won’t come as much of a surprise. This is India, after all.

Even less shocking: the fact that AK Antony, defence minister for the perpetually corruption-plagued Congress-led government, failed to act when the general notified him of the bribe two years ago.

When asked about it Monday, Antony said he would order a probe into the matter: “We have to handle it.”

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