Delegation of Financial Powers to Defence Services (DFPDS) 2021

In News

• Recently, the Defence Minister of India released an order on Delegation of Financial Powers to Defence Services (DFPDS) 2021.

Key Highlights of DFPDS 2021

• It is providing enhanced delegation of Revenue Procurement powers to the Armed Forces (the Army, Navy and Air Force).
• Guidelines: The DFPDS 2021 consists of guidelines related to the following Schedules of Financial Powers:
  • Army Schedules of Powers-2021 (ASP-2021)
  • Navy Schedules of Powers-2021 (NSP-2021)
  • Air Force Schedules of Powers-2021 (AFSP- 2021)
  • IDS Schedules of Powers-2021 (ISP-2021)
• Focus Areas:
  • Financial powers devolved to field formations 
  • Operational preparedness 
  • Promoting ease of doing business and
  • Jointness among Services
• Financial powers:
  • Delegated Financial Powers of Vice Chiefs of the Services have been increased by 10 per cent, subject to an overall ceiling of Rs 500 crore.
  • New Schedules for Field Commanders Special Financial Powers to meet Strategic/Operational requirements, in line with the existing Army Schedule on ‘Army Commanders Special Financial Powers’ have been introduced for Navy and Air Force.
• Emergency Powers: Enabling provision of Emergency Financial Powers to Field formations below Command level for Defence Services incorporated in Emergency Powers Schedule for ops immediate military necessities.
• General Enhancement: A general enhancement of up to two times has been approved for the Competent Financial Authorities (CFAs). 
• Delegation of Non Procurement Powers: Substantial delegation has also been approved for non procurement powers.
• Indigenisation: Up to three times increase in Schedules related to Indigenisation/R&D to achieve ‘Atma Nirbhar Bharat’
• A new schedule on hiring of aircraft and associated equipment has been introduced for the Indian Air Force which includes hiring of Air to Air re-fuellers. 
• For the Indian Navy, powers for replenishment of Disaster Management Bricks have been delegated to Command Level for immediate response to Natural Disasters/HADR Operations.
• Empowered Committee: Clarifications or interpretation of provisions will be addressed by an Empowered Committee headed by AS&FA, Ministry of Defence with representatives of Department of Defence (DoD)/Department of Military Affairs (DMA).
• Monitoring: A system of oversight, disclosure and internal audit mechanism will be put in place by the administrative wing of DoD/DMA in consultation with MoD (Finance). 

Significance

• Speedy Decisions: The enhanced delegation of Financial Powers 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.
• Enhanced Efficiency: It will not only overcome procedural delays, but also bring about greater operational efficiency. It will accord greater efficiency in attaining operational preparedness of the Defence Services. 
• Greater Decentralisation: DFPDS 2021 will provide enhanced impetus towards ease of doing business right up to the grassroots level and facilitate greater decentralisation through enhanced devolution of delegated financial powers.
• Plugs Operational Needs: It is an important step to help plug operational needs of the armed forces. It will accord greater efficiency in attaining operational preparedness of the Defence Services. 
• Boost to Infrastructure: It is another big step in the series of defence reforms being undertaken by the Government to strengthen the security infrastructure of the country. 
• Atmanirbhar Bharat:  The order supports the resolve to make the security system of the country strong and ‘Atma Nirbhar’.

Conclusion

• 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. 

Source: IE