DAC Ap­proves Ma­jor Changes in DPP

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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.

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