Monday, March 1, 2010

The cost of Antony's halo


Sarojini Naidu famously observed that it cost India millions to keep Gandhi in poverty. It is harder to determine what this country pays to perpetuate Defence Minister AK Antony’s reputation for honesty, but the monetary penalty alone is thousands of crores per year.With arms inflation at 15 per cent per annum, a five-year delay means that India pays twice what it should have. And when that equipment is obtained through government-to-government purchases and other single-vendor contracts, the cost is about 25 per cent more than it would have been in competitive bidding. Conservatively estimating that delays afflict just half of the defence ministry’s Rs 50,000 crore procurement budget, India buys Rs 25,000 crore worth of weaponry for 125 per cent more than what it should have paid................................business-standard

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