NEW DELHI — The Indian Army is facing an acute shortage of ammunition, and even the War Wastage Reserve, which is required to maintain supplies for at least a 40-day war, has fallen to a 20-day supply, according to the latest report of India's Comptroller and Auditor General (CAG).

The latest 79-page "Report of the Comptroller and Auditor General of India on Ammunition Management in Army," for the year ended March 2013, and (cq) says there was a n ammunition shortage for 125 of the out of a total of 170 types of ammunition used, mainly for armored fighting vehicles, artillery guns and for use by the infantry. Defense News has a copy of the report, which was just released in May.

A Defence Ministry official, while admitting to the that there is shortage, of ammunition, said the supplies have increased by more than 15 percent since 2013.

In addition to shortages, an Army official said, the quality of ammunition procured from the state-owned ordnance factories, which is the only source of ammunition supplies, is of inferior. India does not permit the manufacturing of ammunition by in the private sector. Ammunition is procured either from the ordnance factories managed by the state-owned Ordnance Factory Board (OFB) or through imports, largely from Russia.

The CAG report says the level of shortages of critical ammunition, especially for tanks and air defense systems, is high.

"The percentage of critical ammunition [shortage] in high caliber ranged up to 84 percent during the five-year period of audit," says the report, which covers the years 2008-2013. "The critical shortages impacted the operational preparedness and training regimen of the Army."

The shortages began after the blacklisting of Israel Military Industries (IMI) was blacklisted of Israel in 2008 and its as the company's tie-up with state owned OFB to produce high-tech ammunition for tanks was scrapped. IMI was accused of bribing OFB officials. The shortage was later made up by imports from Russia.

"There is a shortage of specialized ammunition, like armor-piercing, fin-stabilized discarding sabot [APFSDS] rounds, owing to cancellation of the Israeli contract. These are made up by imports or through surge capacities of OFB, " said defense analyst Arun Sahgal, a (cq), retired Indian Army brigadier general.

India purchased 66,000 such shells of APSSDS from Russia for worth $450 million late last year.

Defense analysts say the Indian Army is totally dependent on state owned OFB and Russia for the supply of ammunition.

"Russia, which has a near monopoly in the supply of ammunition, has not fulfilled its commitment to set up ammunition factories with state owned Ordnance Factories, especially for making ammunition for Smerch multibarrel rocket launchers and ammunition for T-90 tanks," defense analyst Nitin Mehta said. (cq),

Amit Cowshish, a (cq) , retired MoD financial adviser, said, "It is quite apparent that OFB does not have the capacity to meet the full requirement within the desired time frame, and therefore we will have to resort to imports for some time to come to make up the deficiency."

The Indian Army official said a lack of technology transfer for high-tech ammunition has also contributed to the shortage. When contracts were signed with Russia to purchase T-90 and T-72 tanks and air defense guns, no technology transfer was included to produce bought for select ammunition, leading to total dependence on Russia.

"While buying T-72 and T-90 series tanks from Russia, India got only the technology from Russia for making HE [high explosive] and HEAT [high explosive anti-tank] ammunition for the tank but did not obtain the technology for 125mm APFSDS ammunition, which is the most crucial ammunition for this tank," the first Army official (first one) said.

"OFB is capable of manufacturing most types of ammunition except some modern tank and artillery shells for which it is acquiring technology. However, there is lack of accountability in the OFB," said defense analyst Rahul Bhonsle, a (cq) , retired Indian Army brigadier general.

Defence Ministry sources also cite inadequate a lack of funding.

"There is a shortage of funds as generally projections by the MoD for the armed forces are cut back by the Ministry of Finance in the final budget by 25 percent or so," Bhonsle said. "This is a vicious cycle; there is a problem of budget management wherein [financial] surrender from capital accounts and internal adjustments have led to loss of credibility of MoD's financial management, which in turn leads the Ministry of Finance to believe that the services can do with lesser allocations."

Another Indian Army official said that in addition to curtailed supplies from OFB, there are issues of quality management. "Users want the weapons inspection agency, Directorate General Quality Assurance, which is presently under the MoD, to be brought directly under the Indian Army to ensure greater participation of the users in quality management."