Delegation of more financial powers to three services have resulted in faster acquisition: MoD

The delegation of enhanced financial powers to the three services has led to a significant increase in acquisition of military hardware and other equipment, the defence ministry said on Friday.

It is observed that there has been a clear surge in the cases being finalised by the service headquarters and other formations, leading to a decrease in the time taken to finalise the procurement cases, it said.

During the 2016-18 period, the three services were progressively delegated higher financial powers for both routine as well as emergency procurement with an aim to reduce the procurement time-frame.

On the capital side, the services now have the power to accord an Acceptance of Necessity (AoN) for individual schemes costing up to Rs 300 crore.

The cap on granting AoNs to the three services between 2015-17 was Rs 50 crore, which was increased to Rs 150 crore in 2017-19. The limit was further enhanced to Rs 300 crore in 2019-20.

On the revenue side, the services are now authorised to clear proposals amounting up to Rs 500 crore at their level. Earlier, the limit was Rs 200 crore.

The defence ministry undertook a review in July to assess the impact of higher delegation of financial powers to the three services.

"As far as the Indian Air Force is concerned, around 80 to 85 per cent of the contracted value is now sanctioned at the Air HQ itself," the ministry said.

It said the value of the AoNs accorded and contracts concluded under the delegated financial powers of the commands and lower formations had also increased steadily.