Army Chief Gen MM Naravane on Thursday strongly called for “ruthlessly” shedding norms and archaic rules to speed up military modernisation and said the colonial era L1 concept under which contracts are awarded to the lowest bidder has lost its relevance.

He also mentioned the “big challenges” facing the Army in avoiding technological obsolescence and said that “the danger that our long-drawn procurement processes and bureaucratic speed-breakers would prevent us from acquiring cutting edge technology is a real one”.

In an address at the PHD Chamber of Commerce and Industry, Gen Naravane, referring to the L1 concept, wondered why price should dictate the choices of the armed forces when the money is destined to be pumped back into the domestic economy as the focus has been on procuring indigenously-developed military hardware.

“In the defence sector, there is a thrust towards ease of doing business. The industry too needs to proactively push for reforms. Processes that are out of sync with contemporary times and our future vision must be ruthlessly shed for modern best practices,” he said.

“The L1 system is one such legacy of the colonial era that has lost its relevance in a system that is pushing for indigenisation. After all, why should merely price dictate our choice, when the money is destined to be pumped back into the domestic economy,” he said.

Gen Naravane said that much work has been done in bringing about systemic changes but archaic rules and processes still exist, defying logic and are at variance to modern best practices.

“With the cycle of new and disruptive technologies getting shorter and faster, avoiding technological obsolescence remains a big challenge. The danger that our long drawn procurement processes and bureaucratic speed-breakers would prevent us from acquiring cutting edge technology is a real one,” he said.

“Much work has been done in bringing about systemic changes with the aim of ease of doing business. This however remains a work in progress. There are still archaic rules and processes that defy logic and are at variance to modern best practices. This needs to be addressed,” he added.

The Chief of Army Staff cited the example of Israel to emphasise how even small countries with huge challenges and limited resources have been able to achieve so much by riding on a vibrant and responsive defence ecosystem.

“Israel is an apt example. As contracts are signed with local businesses, the investment in Defence is ploughed back into the economy,” he said.

Gen Naravane said technology is driving the “revolution in war-fighting” and that the Indian MSMEs need to reinvent and engage themselves in the niche domains and build capabilities to offer innovative solutions.

The Army Chief said the national security is not the preserve of the armed forces alone and it is a “whole of government effort”.

“Equally true it is that wars are fought by nations and not by only by the armies. The government has taken a number of initiatives to create a conducive environment and a supportive ecosystem to encourage the defence industry to grow and expand,” he said.

He also mentioned the “extremely positive results” of the government granting emergency powers to the armed forces for critical procurement. The emergency powers were granted in June last year till March and it was subsequently extended till August.

Gen Naravane said 113 contracts for revenue procurement of operationally critical ammunition, armament, vehicles, spares and special mountaineering equipment for almost ₹ 9000 crore were concluded while another lot of 68 contracts for capital procurement were sealed for about ₹ 6,500 crore.

“During the conclusion of these contracts, savings of about ₹ 1700 crore was accrued to the state due to the diligence and financial prudence of the Emergency Empowered Committee at the service headquarters level,” he said.

“The contracts were signed within a year with another year for the deliveries to commence. The system has been a win-win combination for the industry and the user,” he added.

Gen Naravane asserted that the Indian Army is fully committed to promoting the Indian defence industry and that contracts worth over ₹ 16,000 crore were placed on it in recent months .