Opinion - News Analysis

Staying in the shadows

The attempt to legalise defence agents has been largely cold- shouldered by the industry.

ON SEPTEMBER 11 last year, the Defence Ministry sought to bury the ghost of Bofors by lifting the ban on agents in defence deals.

Less than a month later came a long list of dos and don'ts to be followed before an agent was granted accreditation. But eight months after that momentous decision, the attempt to legalise defence agents has been largely cold- shouldered by the industry.

Alarmed by the burdensome regulatory regime spelt out by South Block, the shadowy operator has preferred to continue with his illegal existence rather than own up publicly what he does for a living.

The Defence Ministry is also aware of the fact that it has spelt out too many conditions which no person would wish to comply with to ply his trade in the open. A less charitable view is that perhaps South Block did not want to legalise defence agents. Its hand was forced by the Central Vigilance Commissioner (CVC) who, while examining the working of the ban since 1992, had called for a thorough review of the current policy. And, therefore, countless conditions were laid down to ensure that no formal application was made.

The Defence Ministry, of course, rejects this contention. Nor does it agree that the conditions are too exacting. It is also not prepared to relax the rules because of the storm that would erupt.

It also claims that it has been receiving requests from various firms for the guidelines issued on November 2 last year but is silent on whether a formal application has been filed. With little interest having been shown by the middlemen so far, the entire purpose of legalising defence agents has been defeated at a time when India is poised to make major military hardware purchases because of the current security environment.

The CVC had felt that an open system of registering agents would reduce corruption, encourage transparency, communication and fine-tune procurement.

But agents confess that by revealing details of all contractual conditions, banking details, the amount of commission received from companies etc. to several bodies including the Enforcement Directorate, the Income Tax Department and the Reserve Bank, they would find it difficult to grease the bureaucratic-military chain which makes the final decisions.

Another view is that the agents have so far operated in anonymity. Any firm that is discovered to have employed middlemen is automatically scratched. By declaring themselves and indicating the company they represent, they would be open to blackmail and extortion from politicians and unscrupulous officials of investigating agencies, the agents feel.

The visiting Defence Minister of a country once denied at a press conference that his state-owned company employed middlemen. "Our middleman is our Ambassador to India," he said, presumably in jest.

All the while the scribes knew that the actual middleman was lounging at the back of the hotel conference hall!

Sandeep Dikshit

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• Rulers of the dark
• Staying in the shadows
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