Nirmala Gives Comatose Make in India a Push
One of the hallmarks of Nirmala Sitharaman’s two months as defence minister has been daily morning meetings with the three service chiefs and defence secretary and fortnightly meetings of the Defence Acquisition Council ( DAC).
Sitharaman, who took over on September 7, began with a pledge to speed up decision making. With the files for critically needed defence equipment piling up, she knows the MoD’s weakest link is its slothful bureaucracy. Her predecessor in NDA- I, George Fernandes, realised this nearly two decades ago. Fernandes marched his bureaucrats, who had held up purchases of vitally needed snow scooters, to Siachen. No such treks to Siachen were ordered for defence ministry bureaucrats in the October 28 meeting Sitharaman called in her office in South Block. Even so, the gathering was unusual because it had top executives from major private defence players like L& T, Tata and Bharat Forge, MoD bureaucrats and the top brass of the three armed forces. The defence minister gave out deadlines, pulled up officials and enthused industry officials with her assurances of action. “Why are you sitting on these projects?” an indignant defence minister reportedly asked bureaucrats.
The meeting was meant to jumpstart the MoD’s comatose Make in India programme and also to assure the industry that her ministry meant business. Convincing industry players could be tough, especially since the MoD’s intent has yet to translate into orders. Indigenous projects worth over Rs 2 lakh crore have been stuck for years at the MoD awaiting a decision. These include Rs 19,000 crore worth of repeat orders for proven systems like the Akash surface- to- air missiles and Pinaka rocket systems. None of the Acceptance of Necessity ( AoN) cases placed by this government have materialised into contracts.
Also held up are critical development contracts for completely indigenous ‘ Make Projects’ where the MoD bears as much as 90 per cent of the prototype development cost. Projects include those for Tactical Communication Systems worth Rs 12,000 crore, Battlefield Management Systems worth over Rs 70,000 crore and for Future Infantry Combat Vehicles for Rs 26,000 crore.
Nor has there been progress on the ‘ Make- II’ projects either, the 44 products announced by the MoD last year. These include equipment for the army, navy and air force like gun barrels, diesel engines and drones worth over Rs 20,000 crore funded by private players. The former commerce minister’s angst is not without reason. She knows the projects have the potential to energise the SME sector. Sitharaman assured industry representatives of action and promised to clear the ‘ Make’ projects by December- end. Sources say she will review the progress in the first week of the month.
Sitharaman said the government was fully committed to removing all stumbling blocks and facilitating the entry of the private sector in defence manufacturing to attract high value foreign investment into the sector. Three days later, on October 31, she signalled this intent by clearing a Rs 21,000 acceptance of necessity for Light Utility Helicopters for the Indian Navy. These 111 helicopters will be built within the country by an Indian private sector firm in collaboration with a foreign ‘ Strategic Partnership’, under the eponymously named programme. The first step in a lengthy process that could take seven to eight years to bear fruit.