Bold article indeed....but it missed the current scandal involving the navy completely.
Kamla
Kamla
Kiran Jonnalagadda <[EMAIL PROTECTED]> wrote:
This is a bold article.
http://economist.com/displaystory.cfm?story_id=8058443
Arms sales in India
Scandalous procurement
Round up the usual suspects
DEFENCE procurement in India has a big element of farce. For two
decades, arms companies have been forbidden to use agents in their
efforts to peddle wares to the government; a ban they have routinely
ignored. The agents are well known. Some are fixtures on Delhi's
diplomatic circuit; one owns a central Delhi hotel; another has a
publicly declared stake in a low-cost airline. Together with their
underlings, who are dubbed middlemen, they are present in virtually
every defence dealthough they are not allowed to visit the Ministry
of Defence (MOD) or meet officials. Nor do they seem to suffer unduly
when, in need of a high-profile scapegoat, governments occasionally
raid their offices and homes, and leak damaging allegations about
their business activities to newspapers. Of course, these usually
turn on the agents' involvement in a defence deal under the previous
administration.
This cycle was repeated on October 10th. The Central Bureau of
Investigation (CBI), which is controlled by the Congress-led
government, raided 35 agents' premises in Delhi and other cities. It
then registered cases against George Fernandes, the defence minister
in the previous government, led by the Bharatiya Janata Party; Jaya
Jaitley, a former president of Mr Fernandes's Samata Party, and
Admiral Sushil Kumar, a former navy chief, over a $269m order placed
in 2000 with Israel Aircraft Industries (IAI) for its Barak missile
system.
The CBI alleged that Ms Jaitley received an illicit payment of 20m
rupees (then $433,000) on the deal, and that the admiral colluded
in the scam by favouring the Barak over a missile system called
Trishul, which was being developed by the DRDO, India's leading
defence research establishment. This is despite the fact that the
Trishul was nowhere near ready for commissioning in 2000, 17 years
after the DRDO started work on it, and little progress has since been
made. Moreover, India's navy is happy with the Israeli missiles. In
January the DRDO and IAI struck a $350m deal to develop jointly a
long-range Barak air-defence system for use by their two countries'
navies.
The forlorn bid to ban agents was introduced by the late Rajiv
Gandhi, a Congress prime minister in the mid-1980s. But instead of
sluicing the system as he intended, the ban criminalised agents
without banishing them. One resulting scandal, involving agents in a
Bofors howitzer gun contract, dragged on for almost the duration of
the ban; it was ended earlier this year. There have been several
efforts to end the farce by registering reputable representatives of
defence companies, as opposed to dodgier freelancers. On October 14th
Manmohan Singh, the prime minister, said that since agents could not
be eliminated, they should perhaps be recognised. But MOD officials,
some of whom have prospered from the current mess, are loth to
register anyone. For their part, the agents fear that if they are
registered, they will have to pay a good deal more tax.
--
Kiran Jonnalagadda
http://jace.seacrow.com/
