Josy Joseph, TNN | Sep 23, 2012, 12.16AM IST
NEW DELHI: The government has taken an unprecedented decision to impose severe restrictions on the financial powers of Defence Research and Development Organisation (DRDO) chief Dr VK Saraswat after an internal audit report and an ongoing CAG scrutiny raised red flags over many of his decisions.
The move is unprecedented in many ways since DRDO chiefs enjoy exalted position —one of them Dr A P J Abdul Kalam even went on to become the President. DRDO also enjoys a huge amount of autonomy because of the strategic nature of its work and is rarely questioned on its financial decisions.
However, all this has changed. Sources said the ministry of defence (MoD) has issued an order saying that the DRDO chief would have to take all financial decisions in consultation with the finance division of the ministry. Until now, DRDO chief could grant financial approvals of upto Rs 50 crore on his own, without having to consult with MoD finance.
The financial powers of DRDO chief were upped in mid-2010 through an order, which now the government believes was against the norms. The enhancement of his powers, especially as DG (DRDO) of upto Rs 50 crore where he only needed the concurrence of the financial advisor within DRDO, has now raised hackles in the government. The DRDO financial advisor reports to the DRDO chief.
Sources said the enhancement of DRDO chief’s financial powers went against the recommendations of an MoD panel headed by present Chief Vigilance Commissioner Pradeep Kumar when he was the defence secretary. They even allege that defence minister A K Antony may have been misled into approving the enhanced financial powers for DRDO chief in 2010.
Dr Saraswat holds three positions concurrently—scientific advisor to the raksha mantri, DG (DRDO), and secretary defence (R&D). Under the enhanced provisions, as DG (DRDO) Dr Saraswat can approve contracts upto Rs 50 crore without referring it to MoD. While, as secretary defence (R&D) Dr Saraswat has financial powers upto Rs 75 crore but would MOD finance approval. Over the last two years, Dr Saraswat had been approving most contracts in his role as DG (DRDO) without referring them to MoD finance.
The Comptroller and Auditor General (CAG) is believed to have sent a draft para of its ongoing audit, raising questions over the way many financial decisions within the Rs 50 crore limit was approved by DRDO chief, without enough oversight.
According to the new order issued a few days ago by the M0D with the approval of Antony, Dr Saraswat has been asked to exercise his financial powers, ranging between Rs 25 crore and Rs 75 crors, “with consent” of MoD (finance).
Chief Comptrollers (CCs) of DRDO have financial powers upto Rs 25 crore. They would continue to exercise their authority in consultation with the financial advisor of DRDO, sources said.
A special audit of the DRDO on the orders of Antony has also found that the powers to sanction projects delegated to DG (DRDO), CC (R&D)s and lab directors was granted on the condition that the projects should be cleared by the Defence Research Council. “There is no government letter constituting the DRC, its functions and powers. The DRC meetings are not formal. There does not seem to be any system of circulating Agenda Briefs to members,” the audit said.
The report pointed out that in many cases the expenditure incurred on scientists and other manpower deployed on a project is not included in the project cost estimates to keep the total budget under the financial powers available to Dr Saraswat and his other officers.
A project titled “product support and product improvement of Nag weapon system” at a cost of Rs 28.35 crore was sanctioned by Dr Saraswat “even though the CCS (cabinet committee on security) approved Integrated Guided Missile Development Programme is still not closed in so far as NAG missile is concerned,” the report says.
Dr Saraswat approved a project worth Rs 49.82 crore for design and development of elctro-optical sensors for air-borne platforms such as UAVs and Aerostats. This was done “by reducing the cost proposed by the Lab (Rs 70 crore) so as to bring it just under Rs 50 crore, which is his sanctioning power,” the audit said.
DRDO chief sanctioned a facility for electro-optical system testing at a cost of Rs 35 crore by “DG DRDO to create a facility, which is essentially required to meet the objectives of an already sanctioned project. However, the old project’s cost was not revised with the approval of appropriate CFA,” it added.