The new Defence Procurement Procedure, which is in an “advanced stage”, is expected to be in place in the near future, according to defence minister Manohar Parrikar.
Addressing the DEFCOM seminar in New Delhi on Monday, the minister said “the government’s effort is to have as much indigenisation as possible”.
However, it cannot happen overnight because even with best efforts, only 10% increase can be achieved. Underlining that the government has been pushing very hard, he assured the industry and the armed forces that the government is focusing on ‘Make in India’. “Our effort will be to depend on indigenously manufactured items because for a very rare eventuality in a war, you can really depend on your own resources,” he said.
After one full year of holding out promises of revamping the DPP and policies on areas including offsets, regulation of the role of agents, blacklisting of defence manufacturers and ‘Make’ projects, a 10-member committee was set up by the MoD to suggest changes in DPP 2013 so that acquisition programmes do not remain mired in procedural muddle.
The committee is headed by former defence secretary Dhirendra Singh, a representative from industry bodies, Sujith Haridas of CII, two serving joint secretaries from the MoD and officers from the three services. They have already submitted their report.
Following recommenations of the Dhirendra Singh committee report on the amendments to be made to the Defence Procurement Procedure, 2013, the MoD formed a 10-member task force for formulating the parameters with which the government will identify “strategic partners” in the Indian industry for the defence sector.
The task force until last week had not submitted its `parameters’ based on which the strategic partners among the Indian industry would be identified, the “modalities” by which the so identified industry would be co-opted in defence manufacturing, and the “covenant” under which an understanding will be achieved between the government and the so-declared industry.
Sources told FE: “The 10-member panel has on board people including Dr Atre, Sanjay Garg (joint secretary, MoD, Naresh Tacker (MD, ICRA), Shradul Shroff (corporate lawyer), Ishant Shankar (ex-BHEL), NR Mohanty (Director NALCO) and VP Shetty (JM Financials).”
The Dhirendra Singh panel report had suggested that the matters raised by it be clarified at the earliest so that the strategic partnership could be taken forward. ” Such a recommendation goes against the accepted grain of thinking which prefers competitive bids involving technical and commercial parameters. It is hence considered desirable that the committee’s reasoning be spelt out in detail,” it had said.
Explaining the procedure, a former financial adviser (acquisition), MoD, Amit Cowshish, said: “The committee (will) give recommendations which will then be examined by officials in MoD, its finance division and service headquarters — before someone is actually tasked to convert the accepted recommendations into a workable draft of a new DPP.”
“The draft would again have to be vetted by the officials. Depending on what the recommendations are, some other ministries may have to be consulted. It is only then that one can expect a new version of the DPP to be released,” he added.
Sources have indicated to FE that DPP 2013 could further simplify the ‘Make’ (Indian) clause.