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Wednesday, March 6, 2013

The Honeymoon Is Over, Brace For Darker Days Ahead

For a country with the world’s third-largest standing Army, seventh-largest Navy and the fourth-largest Air Force it should not come as a surprise when, from time to time, there are cases of financial misappropriations or alleged kickbacks associated with military procurements undertaken to sustain the armed forces’ force modernisation efforts. But what is undeniably surprising is that almost all the procurement scandals that have come to light thus far since the early 1980s have involved Western companies such as Sweden’s Bofors Defence (now part of BAE Systems) and Germany HDW (now part of Germany’s TKMS). Despite the fact that more than 70% of the armed forces’ operational weapon systems have since the early 1980s been imported from the former Soviet Union (USSR) and its successor state, the Russian Federation (in total, from 1960 till 2000, the USSR and Russia supplied India with almost $35 billion worth of military hardware), there has never been even a single recorded or revealed case of questionable purchases of weapons by the Ministry of Defence (MoD) from either the USSR, or Russia, or other former East Bloc countries like Poland, Bulgaria, the Czech Republic, Slovakia, Kazakhstan, Uzbekistan, Ukraine or Belarus. That is until six years ago.

The first ever revelation about alleged kickbacks received by senior MoD officials, including a Defence Minister himself, as a quid pro quo for purchasing weapons from the erstwhile USSR appears in the book titled ‘The Mitrokhin Archive, Volume II: The KGB and the World’, published by Penguin/Allen Lane. The book opened a Pandora’s box not only about the nature of bilateral relations between India and the erstwhile USSR between the 1950s through to the late 1980s, but also throw some light on how military-industrial cooperation between the two countries and India’s defence procurement practices throughout the 1970s and 1980s, both marked by a remarkable degree of opacity during this period, climbed to dizzying heights. The book, jointly written by Vasili Mitrokhin, a former senior archivist of the USSR’s civilian intelligence agency, the KGB, and Cambridge University Professor and intelligence historian Christopher Andrew, is a sequel to the whistle-blowing Volume I that was published in 1999 (detailing the KGB’s operations conducted in the West between 1917 and 1991) and has since been appreciated worldwide for the authoritativeness, quality, minutae and detail of the information copied over a 12-year period from thousands of top-secret KGB files by Mitrokhin, who defected to the UK after the USSR collapsed in 1992. Volume II deals with the KGB’s attempts to ‘communise’, ‘Sovietise’, make friends and influence people in the developing world, and two of its chapters reveal how in the 1970s India was one of the countries most successfully penetrated by the KGB, how and why India became a model of KGB infiltration of a Third World government in the 1980s, and why the KGB ‘residency’ in Delhi was one of the largest in the world outside the Soviet bloc, and was awarded the rare honour by the Centre (KGB HQ in Moscow) of being promoted to a ‘main residency’. The most significant revelation, as far as military hardware procurements from the erstwhile USSR go, is that India’s Defence Minister V K Krishna Menon in the mid-1960s was successfully persuaded to buy MiG-21PF (Type 74) interceptors instead of the English Electric Lightning for the Indian Air Force (IAF), and in return his general election campaigns in 1962 and 1967 were KGB-funded.

Yet, despite such authoritativeness, caution would be well-advised here. For while it is generally appreciated that the Soviets were extremely active in trying to influence Indian ‘intellectual opinion’ between the 1950s and 1980s, Volume II reveals only a part of the whole story. And this is because the KGB constituted only a part of the gigantic Soviet information-gathering apparatus that in a country like India also had several personnel and ‘indigenous high-value assets’ working in parallel for/in the payroll of other Soviet agencies such as the GRU (military intelligence), accredited Soviet mass media agencies such as Izvestia, ITAR-TASS, Novosti and Pravda, and most importantly, the Delhi-based Trade Representative’s Office that reported to the USSR’s Ministry of Foreign Economic Relations, which in turn was the sole Soviet government organ responsible for marketing and supplying weapons of Soviet origin to 76 countries, including India. To gain a comprehensive appreciation of the former USSR’s ‘intellectual penetration’ of India and its consequences as far as Indian military hardware procurements go, it is best to start with trying to find out where India found itself in the Soviet scheme of things. The USSR began engaging India seriously soon after the Sino-Soviet split in the early 1960s and took India seriously since the late 1960s because it had global interests, notably a definite military threat from the People’s Republic of China (PRC) and a desire to reduce the US influence in the subcontinent. This was the only basis for the India-USSR relationship, which acquired a strategic dimension in August 1971 when both countries inked the India-Soviet Treaty of Peace, Friendship, and Cooperation and consequently both countries got what each wanted—the USSR achieved strategic encirclement of the PRC while India got:

* A credible but limited duration nuclear umbrella to discourage and even neutralise any Chinese military adventurism targeted against India in the event of a future round of India-Pakistan military hostilities.

* The much-needed diplomatic support from the East Bloc at the UN Security Council as well as the crucial military hardware-cum-war wastage reserves required to successfully undertake the 14-day ‘Lightning Campaign’ that resulted in the dismemberment of Pakistan and the birth of Bangladesh in December 1971.

Between 1972 and 1975 there were no major procurements of USSR-built military hardware by India, and the Soviets were quite happy to keep India engaged (and simultaneously keep the PRC strategically encircled and contained) by offering sops like the bilateral rupee-rouble trading system (despite this, non-military trade was never a high point of India-USSR relations), supporting India’s indigenous space technology development projects, and continuing the off-the-shelf supply of weapons like MiG-21M/bis combat aircraft and Mi-8T utility helicopters. These geo-strategic imperatives, however, began undergoing a sea-change when the Indian National Congress led by the then Prime Minister Mrs Indira Gandhi lost the 1976 general elections to the Janata Party. At around the same time, the Indian Army, Navy and Air Force were gearing up to undertake a gigantic, 10-year-long phased force modernisation effort that called for the procurement of big-ticket items like deep penetration strike aircraft (DPSA) and medium multi-role combat aircraft (M-MRCA); principal surface combatants like guided-missile frigates (FFG), guided-missile destroyers (DDG); single-hulled diesel-electric submarines (SSK); main battle tanks (MBT) and infantry combat vehicles (ICV); mobile air defence artillery systems, 155mm/39-calibre towed field howitzers; attack and utility helicopters, plus tactical and strategic transport aircraft.

For obvious reasons, alarm bells must have started ringing in the Kremlin in 1978 when the Janata Party government led by the KGB’s bete noire (Prime Minister Morarji Desai) signed a contract with British Aerospace (now BAE Systems) for the purchase of 120 SEPECAT Jaguar IS/IM DPSAs. Next on the list were MBTs for which the Army had shortlisted contenders from France, Germany, and the UK; ICVs for which Army HQ wanted to evaluate French and German offers; the M-MRCA for which Dassault’s Mirage 2000 was the preferred choice, and single-hulled SSKs for which Kockums of Sweden and HDW of Germany were the preferred suppliers. What made matters far more complicated for the Kremlin was India’s attempt to normalise relations with the PRC in the post-Mao Tse-Tung era, while for Delhi the USSR’s inability to prevent Beijing from ‘teaching a lesson’ to Hanoi (by being unable to avert the Sino-Vietnam War of February-March 1979) revealed the true limits of Soviet politico-military power projection. And what was also not known then to India as well as the West was the USSR’s plan to undertake the invasion of Afghanistan in the fall of 1979 despite the steadily deteriorating economic situation of the Warsaw pact member-states. By 1980 the Warsaw Pact countries were collectively importing 110 million tonnes of crude oil to satisfy internal requirements even though the USSR was by then the world’s largest producer of crude oil and the second largest gold producer. What made matters far worse for Moscow were efforts made by the West led by Reagan Administration to irreversibly cripple the Soviet economy into a state of perpetual decline by forcing the USSR to increasingly to borrow from the West.

For the Kremlin, therefore, it must have come as enormous relief to see Mrs Gandhi being elected as Prime Minister for a third term. And this is where the mystery deepens and the ground gets murkier. For, despite the known limitations and decline of Moscow’s economic/military prowess, the MoD, without any fanfare, in May 1980, inked a $1.6 billion weapons procurement agreement with the USSR (at concessionary terms of 2.5% interest rate) and also followed Moscow in establishing diplomatic relations with the Vietnam-installed Cambodian government of Heng Samrin. This was followed by another gigantic contract signed in 1981 for procuring weapons worth $2.5 billion, followed by yet another contract in 1984 worth almost $3 billion, despite the latter two deals proving to be a heavy burden for the Indian economy, and becoming the main reason why India applied for a $5.65 billion loan from the International Monetary Fund (when the USSR collapsed, New Delhi’s debt to Moscow was estimated at $16 billion, including interest, thanks to the rupee-rouble trading practice). As a consequence of all this, at least three major Indian force modernisation plans mutated to the following:

* Instead of the IAF acquiring a single M-MRCA, the requirement was broken down to an astonishing five aircraft types—49 Mirage 2000H/TH M-MRCAs were ordered in 1984, while 95 MiG-23BNs and 50 MiG-27Ms were imported off-the-shelf between 1981 and 1986 (and another 165 produced in-country between 1983 and 1997) to serve as tactical air support aircraft, and 40 MiG-23MFs and 50 MiG-29B-12s were procured in 1983 and 1986 directly from the USSR as dedicated air superiority combat aircraft. The clinching argument in favour of these procurements was then spelt out by the Soviets to a gullible MoD as: quantity has a quality of its own!

* Against all logic the Navy’s SSK procurements were broken up among two parties, with the single-hulled SSKs procured being the four Class 209/Type 1500s from HDW, along with their advanced, prohibitively expensive licenced-fabrication facilities and intellectual property rights since 1982, while at the same time eight double-hulled Type 877EKM Kilo-class SSKs were procured off-the-shelf from the USSR. This led to avoidable and wasteful expenditures incurred for creating from scratch two parallel types of on-shore infrastructure for SSK training and maintenance.

* The Indian Army, which wanted to acquire a MBT incorporating hit-survivability design features (something that the home-grown Arjun Mk1’s design strongly signifies), from late-1982 became surprisingly reconciled to acquiring some 1,900 T-72M/M1s that incorporated hit-avoidance features. This despite the fact that by late 1980 when the Army conducted field trials of the T-72M it found out to its utter horror that basically, with the exception of the T-55, the overall Soviet approach to MBT design in the post-World War II era was found to be flawed on two major counts: namely, the gamble on not being hit rather than on surviving hits, and the refusal to perceive survivability of the tank crew as a quite distinct issue from survivability of the vehicle, with the former having priority over the latter. The Indian Army got a first-hand demonstration of the T-72M’s acute vulnerability in October 1987 when LTTE guerrillas exploded improvised explosive devices underneath two T-72Ms deployed with 65 Armoured Regiment for Operation Pawan during the battle for Jaffna, blown off.

The rest, as they say, is history. The collapse of the Soviet Union reduced India’s military preparedness to a parlous state throughout the 1990s, thanks to the one-sided weapons procurement policies initiated in the early 1980s. The present UPA government led by the Congress (I), the very party that inked some of the highly questionable arms deals with the erstwhile USSR more than two decades ago, is eminently qualified to explain exactly what ‘enlightened national interests’ prompted the MoD to embark upon such a one-sided and disastrous defence procurement policy, even if it is for posterity.

But back to 1991, when the High Commission of India in Singapore began using the island-state’s banks to borrow for the short-term to clear India’s outstanding bills. It was in the midst of all this that India’s then Union Minister for Finance Dr Manmohan Singh and the then Union Finance Secretary Dr Montek Singh Ahluwalia flew in to Singapore on October 19, 1991, to beg for FDI inflows from the ASEAN member-states, and were staying at the four-star Imperial Hotel. They were joined by the then Union Commerce Minister P Chidambaram and Union Power Secretary Ms Geeta Krishan, who were tasked to obtain financial assistance for pitting up the ENRON gas-fired power generation plant in Dabhol, which World Bank had refused to finance. The  duo of Dr Manmohan  Singh and Dr Montek  Singh Ahluwalia  had earlier gone to Bangkok earlier  to seek  an urgent  loan of $2.2 billion at the  World Bank-IMF  Board of Governors meeting  held from October 15 to 17, 1991. India was saved by two developments then:

* A $ 2.3 billion standby loan provided by the IMF for 1991-1992 and $3 billion for 1992-1993, with India being required to undertake mandatory structural economic reforms as a pre-condition.    

* Since India had run out of foreign exchange reserves in 1991, it was decided to ferry-fly the country’s gold reserves of some 24 tonnes out to Switzerland’s UBS Bank as part of a collateral-based borrowing scheme. Surprisingly, the Union Finance Ministry had at that time refused to entertain Deutsche Bank’s offer to supply a basket of currencies while retaining the country’s gold reserves at the RBI’s HQ in Mumbai as collateral. Why this offer was refused has not been explained by anyone till this day.

Which, then, brings us to present times, when India’s current account deficit is out of control, the Rupee has plummeted 20% (which in turn resulted in Indians investing in imported gold at ever-increasing levels), and the country’s imports have zoomed. FDI inflows too have dropped dramatically since the Mauritius route (that the late Mrs Indira Gandhi had started in 1983) for round-tripping has now dried up, thanks to the GAAR retrospective taxation scheme (a consequence of the case between Vodapone and the GoI) and the non-acceptance of residence certificates of Mauritius.


DAshu said...

humm gloomy days ahead :(

DAshu said...

to be frank this budget did noting only good thing is taxing the super rich if any

Rahul said...

Darker days were imminent and for that we should have used every penny for developing our home capability for continuously supporting our armed forced through the slower times. But instead what we did, is we paid all the inflated demands with arrogance as if honeymoon will never end...

Prasun K. Sengupta said...

To DASHU: Just wait for my accompanying narrative that I will post tonight, which is my personal eye-witness account about what transpired in Singapore during the last quarter of 1991 (when I had met the then Union FM Dr MMS, his then Finance Secretary Montek Singh Ahluwalia, the then Commerce Minister P Chidambaram, & how it all compares with the present-day situation & what all this portends for the future, especially in terms of future military force-modernisation plans & efforts.

To RAHUL: Isn't it evident by now to all of us that between 2008 & now all that has happened on the economic governance front is just 'masterly inactivity'? Even now, if the correct conclusions are not drawn & critical re-structuring is not resorted to, then the country is staring at a dark abyss of unknown depth.

Gessler said...

In the last thread, you said to an Anon that earthlings were warned against landing on the moon after 1972. As scary as that gets, warned by whom exactly? And why?

Kshitiz Kumar said...

1.Can u tell what is with this FDI issue.Will it h+elp us?

Sujoy Majumdar said...

PrasunDa ,

One important thing to mention here is that foreign companies are finding India very very expensive to do business primarily because of the extremely HIGH salaries being demanded by CEO's and other individuals in Management.

Please read this story :

Indian CEO's /Managers are asking sky high salaries inspite of the fact that they bring very little to the table . Their only claim to fame is an MBA .

Naturally Western companies are now shifting their work to other countries like Phillipines , Vietnam and even China since they have made great progress in learning English .

The high level back office work always went to Russia & Eastern europe because Indians did not have the skills to do those work . Whatever little low end work came to India is now also freezing .

Sujoy Majumdar

raw13 said...

I will tell you why Foreign companies are leaving/ reluctant to do business in India. We have just done the same. You go to india direct or work with TCS you train them up and then two years later you start all over over again. The quality and the reliability is simply not there. We shifted around 10% of our ops to Egypt to see how it goes. Here it is scary because they are seriously good. They produce quality and we are in the process of shifting almost all our offshore ops there and they speak really good english. In europe anything todo with india is a bad word.

Anonymous said...


// "In europe anything todo with india is a bad word."//

my dear retarded brother, In Europe, talking about any non European country is a bad word,in simple sense, Europe has the highest standards of quality,not even Chinese have matched that level of quality,so talking about your Chinese brothers in Europe is also a bad word.

to the second point, well if you are shifting your ops to a country like Egypt, than even almighty cannot make the land of pure a developed nation.Talk for your self my deluded brother,I'm simply speechless to learn that Pakistan-a country which has the most TALENTED,most INTELLIGENT,most SOPHISTICATED, hyper ultra cool GENIUS minds- is outsourcing the work to a country like Egypt, simply because the Pakistanis cannot do it.Well the Americans outsource for cost factor, while Pakistanis, because they have no clue of it.LMAO

Anonymous said...

AR will be replaced by BSF.what you think on this development

abs said...

Its indeed very tough economic times for India. And with that India's military modernisation pace is also likely to slacken.
India indeed achieved high levels of growth prior to the financial crisis that hit us on 2008. After the crisis there were indeed high hopes that India would be able to get back to her earlier pace and infact for 2 years the Indian economy accelerated.
However due to no supply side reforms, illiquid conditions, regulatory hurdles and high inflation the investments began dropping sharply and with that India's growth story went for a toss. Consumption could not make up for the investments slack as high interest rates artificially bottlenecked demand.
I hope far reaching supply side reforms are done and with that India should be able to get back to the high growth levels.
Lots of things could be done and the solutions are already there, however I would mention one good example of how lame our politicians are.
In order to create grounds for manufacturing led growth and jobs, the centre formalised the NMP envisaging the creation of NMIZs and placing them in well infrastructure blessed corridors. However at the same time these morons have come up with a new land acquisition policy that would make acquisition and rehabilitation of projects of such large scales next to impossible. It pains me to see this at the same time it makes me laugh.

raw13 said...

What you have is that the lead india had wrt call centers gave you a massive injection of growth. Now you have every country in the world doing it and some are doing it better, much better. Not only are they more reliable, producing better quality. They also speak much better english. Above all are preceived better and have better communication skills.

I used to give Indians benefit of doubt (felt sorry for guys look like misqeens) and then i saw one guy looking at BR. I went and looked, when i saw what you guys get upto remotely, i fired him and now do this on regular basis.

Anonymous said...

In my opinion, what we have seen as growth was most likely a base effect. Salaries in the licence raj days were miniscule (remember the days of 3000-4000) average salary. Suddenly with liberalization and globalization the salaries shot up 10 times. Good for the entrepreneur because salaries still are much less compared to West, good for Indians because salary is 10 times more. But we took it for granted as if it is for ever. And every one felt as if he/she is american.
Our basics like infrastructure, R&D, realization of growth potential are below what is required to simply maintain the status forget additional growth.
Moving from agrarian economy to service oriented was right, but it is not matched at raising potential.
in addition the sensensational scams have made the govt to a sleep mode. even simple things like healthcare, insurance, finance sectors are neglected. Too many people doing same job (IT, ITES) obviously for money, but there is competition from Philipines, Vietnam, Eastern europe etc where cost factor is not in our favor.
The same goes for even china, where cheap manufacturing was a bonus, but what next?
If we have to move ahead, we have to rejig the basics and move to diverse areas. In my view Healthcare, Oriented agriculture, food processing, insurance and banking sectors, and sensitive mining could well employ so many and add growth.
Not to mention we ought to change the educational system, instead of churning young people out of graduation we need more skill oriented education.
It is not so bleak, provided we wake up. Especially elections around the corner, things can take a good turn. Recession in globalized world cannot last for more than 6-8 years (already near that) since money has to change hands and it cannot stay only in safe hands at low divident.

Anonymous said...

to raw13,

there are two things, one is love of relegion and other is love for money.
and mostly it is the latter which wins (else Uncle sam wont be in business, and they do it in such a beautiful way). If any one risks his money for love of Egypt (where even the conservative Indians pulled off Oil business) i would say good luck and you need it. Politically and socially unstable countries cannot favor business, even if returns from the 'super intelligent' are appealing.
so if you love your money, start hiring bright people rather than sticking to nepotism.

Mr. Ra 13 said...

So what in your revered opinion are the Central and Focal Ghapla's that were responsible for the severe downfall of our economy, and how they can be corrected now with or without Mody.

Vivek said...

Hi Prasun
I think economy is as prone to cycles as most things in life, as ur data also shows that India had a good run from 91 to 96 and then slowed down to 4%-5% levels for years before the next high growth cycle came in 2003-08 post which the slow growth years started although we were kept artificially at 8%-9% for couple more years in 2010-2011 by govt / rbi through their fiscal / monitory policies..........all high growth periods usually also have low fiscal deficit (may be hence govt printing less notes) and hence low inflation hence low interest rates and high savings, low CAD due to exports surge, comfortable BOP due to surge in invincibles and fdi/fii etc........but then one tends to overheat and hence cooling off needed, supply side fails to cope with massive demands, inflation shoots up and hence interest cycle and everything else also reverses, similarly real estate booms with high gdp and the end of high growth period leads to a real estate crash (as in 96-97 and 2009)........I think the current cycle is no different than all this except in 2 ways - firstly that this is also partly self created (partly naturally cyclical also) due to excessive govt/rbi action in 2009/10 due to global crash fears, such govt spending and low rate regime created demand (hence 2 years of growth) but they forgot about supply side and hence the inflation and hence the current 4.5% gdp, post that govt failed again when it almost stopped functioning in 2011 and 2012.
Secondly we have failed to have any long term strategic policy to manage our CAD, we must try to become a trade surplus country (excluding oil), for oil also we must look at alternatives like ethanol or arunachal's shale oil/gas or any strategic tieup/buyout with any oil producing country (like china does).......china manages its economic cycles much better because it doesn't have to worry abt CAD or BOP due to its exports.
Lastly we must end our black economy which is too huge to be kept out of mainstream for too long otherwise govt will always struggle with its fiscal deficit and hence notes will be printed and hence inflation/interest cycles will go on and on

I hope that PC manages to turn the cycle soon and the next growth period starts sooner

Ur views pl

Regret the length of the post

Anonymous said...

Prasun please post something related to defence. For economics there are quite a large number of forums.

You once said that there are efforts on laser front with Russian and israeli help, can you post something on that ?

Also whats the buzz in delhi about 197 chopper deal's fate ?

Prasun K. Sengupta said...

To GESSLER: For that you have to watch the videos whose weblinks I had provided in the previous thread. And then also ask why ISRO has to date not released colour-photos of the moon’s surface.

To SUJOY MAJUMDAR: Also to be considered is the cost of doing business in India in the midst of a creaking infrastructure.

To ABS: Taking advantage of the 2008 financial crisis, India could have then proceeded to usher in bolder administrative economic reforms & restructuring, for in every crisis there also lurk opportunities that need to be encashed. However, after P Chidambaram’s departure from the Union Ministry of Finance, a peculiar & unexplainable kind of lethargy set in, leading to severe economic mismanagement at the macro-level, highly reminiscent of the 1980s. And instead one was saddled by ‘masterly inactivity’ at the Centre on the issues of administrative & economic reforms & the worst was the retrospective taxation legislation, which was, is & will remain the scariest scenario. You’re absolutely right, therefore, in classifying the decision-makers as ‘morons’ who specialise in taking one step forward & then immediately two steps back.

To Mr.RA 13: In my ‘humble’ opinion, the macro-economic reasons are already listed above in the posters & Anon@1.03AM has added his incisive analysis. The bottomline is always about taking the lead in decisive & purposeful governance (i.e. the ability to take difficult decisions without any difficulty) on a sustained scale & not giving discredited & demoralising excuses like ‘compulsions of coalition dharma’. Regretfully, while India has no dearth of self-styled ‘leaders’ of all hues & shades, what is missing is the display of statesmanship. I will dwell more on all this in my principal narrative of this thread (to be uploaded later today).

To VIVEK: You’re spot on in your assessments, & I too am convinced that a lot more could have been done to galvanise the ‘supply side’ & instead of clutching on to five-year planning cycles, today what India now requires is a 10-year planning cycle at the very least. Getting rid of the ‘parallel economy’ or black money & drastically reducing the CAD can both be easily achieved by expanding the tax-base & ushering in GST without any further delays, for starters. My principal worry, however, remains the Centre’s prolonged inaction over the issue of energy security, which I see as the biggest emerging medium-term & long-term threat to the country’s economy & consequently, national security. For instance, just see how swiftly Myanmar has proceeded to exploit its offshore hydrocarbons reserves along the Andaman Sea & compare that with India’s efforts in that same area.

Prasun K. Sengupta said...

To Anon@7.18AM: Patience, ol’ chap, patience. For the two issues of sustainable & inclusive macro-economic growth & national security objectives are inter-twinned & this will become evident after you’ve gone through my narrative above, which I will upload later today & something that you will never come across in ‘desi’ print/electronic media publications like INDIA TODAY or OUTLOOK. And this relates especially to what transpired in the 1980s & 1990s & the prevailing mindsets of that period.
As for all the 'buzz' about the fate of 197 to-be-imported LUHs/RSHs, I can only hope that this project is made to RIP ASAP & instead better sense dawns upon the MoD so as to expedite the Cheetal & Chetan deep upgrade helicopter programmes. For, just as in the case of PC-7 Mk2s versus HTT-40, only a self-deluded moron will today opt for a mixed-fleet of imported & locally developed LUHs/RSHs.

Sujoy Majumdar said...

Very true PrasunDa .

But the mess that India finds itself in , it is extremely difficult to make investments in the face of huge fiscal deficit .

In the fiscal deficit ranking for countries India ranked 14th in 1991 . In 2013 India has fallen to rank 148.

So even if we have to get back to our 1991 rank it will require a Herculean effort . Therefore, I do not see any major investment projects coming up across India except maybe in the prosperous states of Punjab and Gujarat .

ram kumar said...

hello sir...
Have u heard that this year only Rs 1 cr has been allocated for r&d purpose in comparison to Rs 49 cr last year... Has the govt gone off their mind ...
What's the cache or thinking behind this **** ...??

Anonymous said...



sorry for the CAPS and using Prasun's blog. Just expressing my anger over this. I live in UK and knw how badly giant supermarkets collapsed the retail families here.

Finally the Indian Retail markets (there by small and medium retailers and farmers) hurt immensely in the hands of Top management of the super markets and super share holders like Arab sultans and americans.

Here in UK Sainsbury's sueprmarkets share are owned in majority by arabs. We need to see how Dawood and ISI pump instantly printed Indian money in pakistan to buy the shares of these supermarkets in India. We have seen this already in Indian real estate by Dawood and ISI.

Anonymous said...

To continue in my above post, I knew we have massive amount of work to streamline, right from seed sowing to the point of sale POS and a lot in between but that is no excuse for foreign FDI in retail. We need to introspect. We need drastic reforms in agriculture as well, in the way, we cultivate, managing farms, farm lands, using chemical and mechanical means to achieve highest produce with high sustainability .

Mr. Ra 13 said...

Is this true or false:

abs said...

I agree, the leaders that be,got very complacent and loosened all their purse strings and started giving out doles, this resulted in high fiscal and revenue deficits. The reason has been well explained by Swaminathan Aiyar. Sonia Gandhi doesnot believe in prudent economic reforms and hence she removed Chidambaram and brought in Pranab Mukherjee who was always a socialist. I hope tough reforms are pushed now.

Vikram Guha said...


I am eagerly waiting for the commentary that you will upload .

In the interim would really appreciate if you can share some development strategy pertaining to West Bengal . I am quite sure that a number of people from Bengal read your blog & they might well take home some nugget of wisdom from your blog.

This Finance Minister of our's has absolutely no idea as to how he can attract investments . He thinks that lobbying for FICCI is the same as managing a state's finances.

I was talking with a friend of mine in Tripura & he tells me that the people out there are quite happy with the development under the CPM & apparently even Manmohan Singh acknowledges that Tripura is a well governed state .

I simply cannot understand how the CPM that caused such great economic hardships here in Bengal can manage Tripura so well . Maybe the aspirations of the people of that state are not very high .


Mr. Ra 13 said...

Actually this of your topic is serious, sincere and timely and affiliated with all the wider and deep economic concerns that the defense philosophies may need urgently.

Prasun K. Sengupta said...

To Anon@4.16PM: The dynamics of FDI in retail are totally different in India & cannot be compared with those of the UK or any other developed country.

To Mr.RA 13: Perhaps this may help you out:

To ABS: P Chidambaram was probably brought back as Union FM due to some phone-calls made from certain capitals of the G-7 group of countries, especially those whose national leaders had told Dr MMS in Hanoi last year they had ‘great plans’ for a rising & shining India—that’s the most plausible bottomline.

To VIKRAM GUHA: I had already dwelt upon this topic a few threads back last year—i.e. the need for WB to formulate a regional geo-economic growth roadmap that is inclusive of the northeastern states & Bangladesh. Tripura’s dynamics are totally different since that state is not over-populated & natural resources available there can be easily distributed in a near-equitable manner, if required. Like Uttarakhand, Tripura’s small size therefore makes it more manageable from economic & administrative standpoints.

ashi jain said...

prasun sir
did u think that mig29upg,jaguar darin2 & mig 27upg are good fighters

Anonymous said...

According to this report

1. Is this report ?
2. what will be the outcome of direct air to air confrontation between SU-35 and SU-30MKI or Rafale in war.

Akhil Suri said...

Hi Prasun,

Did you read this book

It talks about the various ways in which India will be broken up .

This reminds me of a whitepaper that a leading Chinese Govt sponsored agency had come up just a couple of years ago as to how China can break up India


Gessler said...

??? How many would we buy if the purchase actually happens?

rad said...

HI Prasun
Vladymir radyuhin or what ever says that the su-35 is unbeatable and the rafale will come out 2nd best in an engagement . Its quite clear that he seems to be some sort of mouth piece for the gov of russia and is trying desperately to tell us what they want us to believe. Though they know that russia is selling the amur sub and the su-35 to piss us of,we should call the bluff and make it known more deals will go away if they do this .Obviously the amur is now a compromised sub and it should be out of the race for the very reason , so that russia should know that it cant play us all the time .
Regarding the su-35 it is quite obvious that they are buying a hand full to get the tech and nothing else. Putin seems to be a bad bet for India.I am not convinced that the su-35 is better than the rafale in its multi role capability and flexibility and dependability. I dont think the russians have an answer for the meteor missile .It cud be that they are trying to get the ks-172 in the deal. Your comments please

Jai said...

Being ruled by social democrats(kangress) who are abrahamic cult worshippers india will always remain a banana republic 100% just access mitrokhin archives''india was on sale for KGB bribes'',hoping for a nationalistic(bjp) win as gloomy economic senario is being forcasted similar to that of like 1991-92 situation.As far as millitary arena is concerned happy(:-)) to see india taking step in indigenousing itself, hope post-US era india would be ready to face china as once again border war starts across asia and throughout the world arena.

Anonymous said...

its very clear to any one that su-35 is in a different class to is 10yrs younger. (indians will say otherwise because they always have the best). its a beast made for air dominance. It has much much reduced RCS, infra-red signiture.

Anonymous said...

Su 35 has IBRIS radar But RAFALE
has SPECTRA EW suite

India's Su 30 MKI after Upgradation
will be able to Match SU 35

India was ALSO offered Su 35 but
we preferred to go for RAFALE

And RAFALE plus PAKFA / FGFA will make IAF Much better than PLAAF

J 10 A/ B and J 11 are all struggling

J 20 is just a PAPER Plane

Taiwan Japan and Philipines
are all modernising their airforces
with Latest F 15s and F 16s

Vietnam is also getting SU 30

And US will deploy F 22 and F 35 and F 18 super hornets
against PLAAF along with F 15 STRIKE Eagle and F 16 Block 60


Anonymous said...

Prasun sir,

Some of our peaks in Kargil are still apparently held by the PA? Can you tell us exactly how many and which- by name or no.? And why have we not evicted them yet?

Kshitiz said...

1.sir,why has we still not secured
a permanent seat in SC of UN,despite support from all permanent members

Vikram Guha said...


Is the "search" function in your blog working ? I tried from two different systems but it is not showing any search results . I tried with several keywords but no result.


Anonymous said...

To be concluded is removed now from the post so does this mean this post is not going to be concluded. Anyways... it was quite an interesting read/discussion, would have loved to read the conclusion as well.

Anonymous said...

Sir, When will the Super 30 upgrade program commence ? Under this upgrade programme will the whole fleet of Su-30 be upgraded with Bars AESA radar, Virgilus AESA jammers, MSWS , Ariel TRD , updated engines ?

How is the upgraded Bars radar different from Irbis Snow leopard radar ? Both have the same peak output power of 20 kw.?

Under the deep upgrade programme will the RCS of Su-30 be reduced with coatings ?

Which long range cruise subsonic cruise missile will Su-30 carry ?

Have storm shelters , sun shelters come up alt all the airbases having Su-30 squadrons ?

Could you throw some light as to what actually caused the latest Su-30 crash ?

Some Russian govt official was claiming that Irbis on Su-35 has much longer range than RBE2 of Rafael and hence Su-35 will easily have upper hand in assymetric BVR combat with Rafale . Isn't it true. Irbis out ranges and outclasses RBE2. Spectra EW can break Irbis radar lock upto some moment and distance or make Rafale invisible to Irbis through active cancellation but once Su-35 comes close enough to Rafale it's radar emissions will burn through the jamming and Rafale will be shot down .

Prasun K. Sengupta said...

To ASHI JAIN: Only the MiG-29UPG is a fighter, while the Jaguar IS/IM & MiG-27UPG are not. They are tactical strike aircraft & the MiG-27UPG would have been a lethal all-weather strike platform had it been re-engined with AL-31F turbofan. The Jaguar IS/OM equipped with Honeywell F125 turbofans & DARIN-3 nav-attack suite will be a potent all-weather tactical strike aircraft.

To Anon@8.41AM & RAD: Firstly, the content of any write-up/report depends on the target audience & in this case, since the target is the Indian readership, the reportage is skewed in that direction, while sacrificing objectivity. Firstly, for instance, the report does not mention the fact that China’s PLAAF & PLANAF want Su-35S-type MRCAs primarily to catch up with the far superior assets deployed against China by Taiwan’s ROCAF & Japan’s ASDF. The ROCAF will in future upgrade all its F-16s & Ching-quo IDFs by equipping them with Northrop Grumman-built SABR AESA-MMRs, while the ASDF’s Mitsubishi F-2s have since the early 1990s have had MELCO-developed AESA-MMRs. Secondly, the integrated nav-attack avionics & self-defence suites of the Rafale is still a full generation ahead of that on the Su-35S. Thirdly, it is inconceivable for either the Su-35S & Su-30MKI or Su-35S & Rafale to clash swords against one another, especially in the high-altitude Tibetan Plateau, whose geography alone precludes the element of dissimilar air combat being fought over the skies above Tibet. Therefore, ensuring air-defence over Tibet will always be the sole responsibility of the PLA’s land-based hierarchical air-defence system comprising MR-SAMs, E-SHORADS & VSHORADS, plus high-velocity motorised anti-aircraft cannons.
The PLAN’s acquisition of any number of Amur 1650 SSKs should not even bother India since such SSKs are optimised for littoral operations & are not ocean-going vessels. Therefore, such SSKs will forever be holed up in the South China Sea & East China Sea/Sea of Japan. Lastly, China will be receiving PESA-MMR equipped Su-35S at a time when the IAF will be receiving AESA-MMR equipped Super Su-30MKIs. Consequently, the IAF will always be a full generation ahead of the PLAAF at least for the next 15 years.

To AKHIL SURI: Rest assured that such works of fiction is a sheer waste of time. Instead, what ought to be analysed is whay & how India was broken up into East & West Pakistan & how East Pakistan eventually became Bangladesh, why is Bangladesh now hell-bent upon proving a point to Pakistan by overwhelmingly calling for justice to be done to those JI Razakars, & how is Pakistan now imploding from within.

To GESSLER: Since they’re meant for AEW operations for the IN & CSAR for the IAF, at most therefore the IN can be expected to acquire some six V-22s, & up to 12 for the IAF.

To VIKRAM GUHA: Google screws up from time to time due to periodic servicing of its India-based servers.

To Anon@12.51AM: I will upload the balance of the narrative in a brand-new thread, rest assured.

Prasun K. Sengupta said...

To Anon@1.06AM: Most of your queries have already been answered several times before in several older threads. Between the Su-35S & Rafale, suffice to say that the latter’s non-cooperative-target-recognition (NCTR) capabilities are far ahead those of the Su-35S. Furthermore, as I had explained above, the chances of an outbreak of dissimilar air combat between Rafale & Su-35S are NIL.