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Home arrow Defence arrow 116 licences given to Pvt sector for Defence manufacturing: Pallam Raju
116 licences given to Pvt sector for Defence manufacturing: Pallam Raju Print E-mail
Written by Anand   
Thursday, 25 August 2011
New Delhi: Minister of State for Defence M M Pallam Raju told the Rajya Sabha that the government has so far given 116 licences since opening up of the defence industry to private sector in 2001 adding that a lot of supplies were being realized from the private sector .

He said that private sector companies have the freedom to get into joint ventures and collaborations with the public sector undertakings for defence manufacturing. He added that participation of private sector in defence supplies was quite substantial.

The defence sector was opened up to private sector by the Government in 2001 as part of an overall policy to achieve self reliance in the defence sector through indigenisation.

The Ministry of Defence has been taking various steps for achieving self-reliance in defence production. A 'Make Procedure' was introduced as part of the Defence Procurement Procedure in 2006 to encourage indigenous development and manufacture of defence equipment, and action is in progress for the development of some major equipment under this category.

A Defence Production Policy has also been introduced from January, 2011 with the objective of strengthening indigenous capability in defence production and achieving self-reliance. The policy includes various steps for encouraging indigenous design, development and manufacture of defence equipment by both the public sector and the private sector. It would also encourage and facilitate research and development projects as well as manufacture of defence products by MSMEs. The Offset Procedure introduced as part of DPP 2006 is also aimed at strengthening indigenous capabilities.

As per the target set for 2011-12, the Ordnance Factories would issue arms, ammunitions and products worth Rs.11,700/- crore, while for the 9 Defence Public Sector Undertakings a target of Rs.31,590/- crore has been set for sales/value of production.

He said that the  cost of production of products made by the Ordnance Factories was reasonable and that continuous efforts are made by the factories to reduce costs and to improve quality. "Government is making continuous efforts to modernise Ordnance Factories and to improve their functioning. There is no intention to prevent the entry of the private sector into defence production," he added.

Elimination of Bottlenecks in DPP

The modernization of the Armed Forces is undertaken through procurement of defence equipment/platforms in accordance with the provisions of Defence Procurement Procedure (DPP). However, delays sometimes occur in defence procurement projects due to several reasons such as insufficient and limited vendor base, non conformity of the offers to the Request for Proposal (RFP) conditions, field trials, complexities in contract negotiations, limited indigenous capability and long lead time for indigenization etc. Further, the market for state-of-the-art defence equipment and platforms being circumscribed by denial regimes, limited availability of required type of material, complexities in construction and manufacturing involving integration of large number of systems, assemblies and sub-assemblies also cause delays. To counter systemic and institutional delays, procedures and process are continuously refined on the basis of experience gained during the procurement process. All procurements are guided by the Defence Procurement Procedure (DPP) and time-lines given therein.

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