DAC Approves Major Changes in DPP
WITh The TWIN oBJeCTIVe of infusing greater efficiency in the procurement process and strengthening the defence manufacturing base in the country, the defence acquisition Council ( daC), the apex decisionmaking body of the Mod, took a series of decisions on april 20 including amendments to defence Procurement Procedure (dPP). The highlights of the amendments WR WKh D33 2011 dUh:
for indigenous procurement in the defence Production Policy 2011 has now been made a part of dPP through an amendment that provides for a preferred order of categorisation, with global cases being a choice of last resort. The order of preference, in decreasing order, shall eh: (1) “BXy (,QGLdQ)”; (2) “BXy & 0dNh (Indian)Ó; (3) ÒMakeÓ; (4) ÒBuy & Make with ToTÓ; and (5) ÒBuy (Global)Ó. any proposal to select a particular category must now state reasons for excluding the higher preferred category/categories. The daC has approved the release of a public version of its 15-year long-term integrated perspective plan (LTIPP), outlining the Technology Perspective and Capability Roadmap against LTIPP 2012-27, to enable them to plan their future infrastructure, R&d and technology thrust.
ToT (MToT) has been hitherto reserved largely for oFB and dPSUs through the nomination process. a dPP amendment has been approved that does away with nomination by the department of defence Production and facilitates selection of MToT partners by Indian bidders.
daC has approved an amendment mandating consultations to ehJLQ VXIfiFLhQWoy LQ dGYdQFh RI actual procurement by the Service headquarters, so that capital acquisition plans can be translated into national defence research and development (R&d) and production plans. In addition, a high-level committee has also been constituted for simplifiFdWLRQ RI “0dNh” SURFhGXUhV, ZLWK d view to unleash the full potential of this important category.
daC has approved an amendment for ÒBuy & Make (Indian)ÓProcedure to further simplify it in order to bring it on par with other categorisations.
content has now been GhfiQhG LQ dQ XQdPeLJXRXV PdQQhU, providing requisite clarity and a common understanding.
Ministry has a limited number of acquisition cases under ÒMakeÓ and ÒBuy & Make (Indian)Ócategories, with an estimated value of ` 1,20,000 crore (about $21.8 billion). Instructions have been issued for speedier conclusion of these cases.
Indian defence industry was opened up in May 2001 for 100 per cent private sector participation subject to licensing. The defence Items /LVW KdV ehhQ fiQdoLVhG ey WKh 0LQLVWUy and sent to the department of Industrial Policy and Promotion (dIPP) for QRWLfiFdWLRQ, ZKLFK ZLoo eULQJ UhTXLUhG clarity in the licensing process. The Ministry has categorically clarifihG WR D,33 WKdW GXdo-XVh LWhPV ZLoo not require licensing, thereby, bringing added clarity to the licensing process.
Security Guidelines that will apply to all licensed defence industries have been circulated for consultations with various stakeholders. It is expected that a complete security framework for Indian private industries participating in defence cases will be in place in the near future.
of deemed exports status for certain defence projects and rationalisation of tax and duty structures impinging on the Indian defence industry has been taken up by the Mod with the Ministry of Finance.
defence Production Policy 2011 requires the setting up of a fund to provide necessary resources for development of defence equipment. In order to ensure regular supply of funds to micro, small and medium enterprises involved in manufacturing of defence products, Small Industries development Bank of India (SIdBI) has decided to earmark an amount of ` 500 crore for providing loans, and further, a fund of ` 50 crore for equity support out of ÒIndia opportunities FundÓ managed by its subsidiary, namely, SIdBI Venture Capital Ltd.
stipulation to freeze the Services Qualitative Requirement before the acceptance of necessity ( aoN) stage has been accorded, and the validity of aoN has also been reduced from two years to one year. These measures are expected to expedite the acquisition process and increase transparency. 7Kh fiQdQFLdo SRZhUV RI 6hUYLFh &KLhIV/ dG Coast Guard have been enhanced from ` 50 crore to ` 150 crore for capital acquisition cases.
for all deviations from the defence Procurement Procedure will henceforth be sought from the daC instead of the defence Minister.