Delegation of Financial Powers to Defence Services (DFPDS) 2021

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    • 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. 

    Defence Acquisition Procedure (DAP) 2020

    • The first Defence Procurement Procedure (DPP) was promulgated in the year 2002 and has since been revised periodically to provide impetus to the growing domestic industry and achieve enhanced self reliance in defence manufacturing.
    • The armed forces acquire capital assets according to the Defence Acquisition Procedure (DAP) 2020, which was introduced in September 2020. 
    • 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.

    Source: IE

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