The Ministry of Defence (MoD) has withdrawn new regulations for delegation of financial powers for the armed forces which had been drawn and implemented just six months ago.
An order issued two days ago states that the inherent powers will revert to the 2006 stage which is precisely what was reviewed by a 10-member committee in 2014 following complaints of “irrational’’ powers being given to the armed forces and of “splitting” sanctions for procurements.
The October 26 order states that a new 14-member committee will now review the 2015 DFPDS (Delegation of Financial Powers to the Defence Services) and submit its report by December. The order has been approved by Defence Minister Manohar Parrikar just as the one issued earlier this year.
The MoD has acknowledged that restoration of the inherent financial powers to the DFP 2006 rules has come following pressure from the three forces.
In response to queries from The Indian Express on the urgency for the rollback and a two-month deadline for the review panel, MoD spokesperson Sitanshu Kar said, “This was required in view of the demand of the services for restoring inherent powers since this was creating problems in their day-to-day functioning and showing up in the low expenditure trend.”
The MoD’s reply added, “The Delegation of Financial Powers for the Armed Forces have been revised as an interim measure as far as the inherent powers are concerned. The powers in consultation with the Integrated Financial Adviser (IFA) continues to remain the same as per DFPDS 2015.”
The MoD’s new order, therefore, states: “Inherent powers as per the DFO-2006 for CFAs (Competent Financial Authorities) are restored to the services with immediate effect till completion and acceptance of the report…”
Evidently, what the MoD has described as “problems in day-to-day functioning” has, in the past few months, been reflected in getting financial clearances for even small procurements, field formations, military hospitals.
As reported by The Indian Express in June, a Western Command hospital, for instance, was forced to put up a notice that any “deficiency in service” was on account of delays in financial clearances caused by the new Financial Powers regulations.
Also, the shortage of IFAs and their subordinate staff — despite the attempt to create new posts — on which the DFPDS 2015 regulations leaned heavily, was said to have been causing huge delays in even minor procurements and, as the MoD spokesperson has acknowledged, had begun to reflect in a clear pattern of low expenditure.
In MoD calculations, the amended system was not functioning smoothly. Therefore, the latest order clarifies that in order to fast-track purchases and procurements, wherever IFAs are not posted, cases should be sent for consideration to the next higher CFA in consultation with his IFA.
Also, the placement of any additional manpower in the IFA set-up should be held in abeyance, and assessed only after acceptance of the report of the new committee, which is headed by an Additional Secretary (Finance) in the MoD and has representation from the three services.
The terms of reference of the committee mention that a “rationalization” between the 2006 and 2015 of the DFPDS rules needs to be achieved and that a deterrence/disclosure mechanism to curb misuse of delegated powers should be put in place.