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Tuesday, September 28, 2021

Rajnath Singh unveils new rules to reform financial powers of armed forces

Under the new rules, critical equipment, such as air-to-air refuellers for the Air Force, can be hired for short periods as compared to purchases or a long-term lease, which are not only considerably expensive but also take a long time.

By: Express News Service | New Delhi |
Updated: September 8, 2021 7:32:28 am
All these 7000 personnel are being relocated from the multiple hutments near the North and South Blocks, many of which had been occupied around World War 2. (File)

In an important step to help plug operational needs of the armed forces, Defence Minister Rajnath Singh on Tuesday released new rules to enhance the delegation of revenue procurement powers for the Army, Navy and Air Force. Under the new rules, critical equipment, like air-to-air refuellers for the Air Force, can be hired for short periods as compared to buying them or a long-term lease, which is not only considerably expensive, but also takes a long time.

While the Vice Chief of the Air Force will have powers capped at Rs 200 crore, commanders will have powers till Rs 100 crore for such hiring.

Along with introducing the concept of short-term hiring of equipment, financial powers have also been delegated to new officers among the services, depending on requirements.

The armed forces acquire capital assets according to the Defence Acquisition Procedure (DAP) 2020, which was introduced last September. Along with buying equipment from Indian or international players, DAP 2020 had also introduced a chapter on leasing of equipment for a limited time. Hiring for shorter-durations, under the new powers, will allow the forces to plug immediate gaps.

Singh released the order on Delegation of Financial Powers to Defence Services (DFPDS), 2021, which “aims to empower field formations; focus on operational preparedness; promote ease of doing business and enhance jointness among the Services”, the Defence Ministry said in a statement.

The last DFPDS was released in 2016.

“The enhanced delegation of Financial Powers to functionaries in Service Headquarters and lower formations would result in quicker decision making at all levels leading to better planning and operational preparedness of the Services in a quicker time frame and optimum utilisation of resources.”

The ministry said the “primary focus of the enhanced delegation of financial powers is to empower Field Commanders and below to procure equipment/war-like stores in a speedy manner for urgent operational necessities and meeting essential sustenance requirements”.

Singh called it “another big step in the series of defence reforms being undertaken by the Government to strengthen the security infrastructure of the country” and stressed on the “need to revise the policies to cater to the needs of the Armed Forces,” and said that DFPDS 2021 “will not only overcome procedural delays, but also bring about greater decentralisation and operational efficiency”.

The statement mentioned that a “new schedule on hiring of aircraft and associated equipment has been introduced for Indian Air Force which includes hiring of Air to Air re-fuellers” and for the Navy, “powers for replenishment of Disaster Management Bricks have been delegated to Command Level for immediate response to Natural Disasters/HADR Operations”.

The DFPDS 2021 has guidelines on the Schedules of powers for the Army, the Navy, the Air Force and the Integrated Defence Staff (IDS). Under the new financial powers delegated, the ministry mentioned that a “general enhancement of up to two times has been approved for the Competent Financial Authorities (CFA),” while, in certain schedules “this enhancement at field formations is in the range of up to 5-10 times on account of operational requirements”.

The Vice Chiefs of the services will get a 10 per cent increase in the financial powers delegated to them, with a ceiling of Rs 500 crore. The Chief of the Integrated Defence Staff and the Chairman Chiefs of Staff Committee, will also get financial powers aligned with the vice chiefs.

Additionally, the ministry mentioned that new CFAs have also been added, which include the Deputy Chief of Army Staff, Master General Sustenance, ADG (Procurement)/DG Air Operations/DG Naval Operations, among other in the service headquarters, and in the field formations on account of reorganisation, restructuring or functional requirements.

The ministry mentioned that the Emergency Financial Powers have been given to field formation below the Command levels as well, which were available at the Vice Chief or Commander level officers till now.

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