It was important to integrate the armed forces with the department of defence, he said.
"The defence ministry is unlike any other. Here it is 'us' versus 'them'," the retired Air Chief Marshal said, referring to serving military officers and ministry officials.
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"The chiefs of the three Armed Forces, with an experience of around four decades, are not mentioned in these rules, which state that the defence secretary is responsible for the country's defence," the IAF veteran told PTI.
These officers carried a wealth of knowledge and experience in military security matters, he pointed out.
"Tap this wealth. Give them easy access to your office," Naik, who was the IAF chief from 2009 to 2011, urged the new minister.
Sitharaman, Indias first full-time woman defence minister, took charge of the key ministry from Arun Jaitley earlier this month.
"For a solution to any defence-related issue, the new Raksha Mantri should involve the 'babus' (bureaucrats) and also military chiefs and avoid taking military decisions based solely on the shadow files created by the babus," said Naik, who, since retirement, has been an active member of various defence security and strategy groups.
Naik, who is a key member of the 'Group of 12', comprising top former military officers and led by ex-Navy chief Admiral Jayant Nadkarni, also suggested that Sitharaman visit forward bases and mingle with soldiers.
He said the main need of the military today was equipment. He advocated a "drastic overhaul" of the Hindustan Aeronautics Limited and Defence Research and Development Organisation by splitting them into viable entities under professional management and making them more accountable.
Naik, who has over 3,000 hours of flying in MiG-21 and MiG-23 fighter aircraft to his credit, is active at the Poona Dialogue on National Security, an annual event, and associated with groups such as the Centre for Analysis and Security Studies.
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