A STEP TOWARDS SELF RELIANCE IN DEFENSE SECTOR
SATURDAY, FEBRUARY 11, 2017 BY INDIANDEFENSE NEWS
by Dr Sudershan Kumar
The “Make in India” initiative was launched by Narendra Modi, Prime Minister of India in September 2014 as a part of his wider initiative towards nation building and making our country self reliant. This “Make in India” campaign was devised to transform India into a Global Design and Manufacturing hub and also a world level manufacturing power house. This campaign was crucial and an imperative response to a critical situation in the year 2013, when the economy was in doldrums and growth rate had fallen to its lowest level and the much hyped economy bubble had burst. The global investors were skeptical and had started debating whether the investment in world’s largest democracy was an opportunity or a risk. At this critical juncture “Make in India” initiative was a powerful galvanizing call to Indian citizens, business leaders, entrepreneurs, to give in their best as Indian nationals. Also it was an invitation to potential partners and investors around the world to endow the country with foreign direct investments and manufacture in India. Most importantly, it represented a paradigm shift in Government’s mindset and its reiteration in providing conducive environment to business partners keeping in view with Prime Minister’s tenet of Minimum Government and maximum governance.
The Department of Industrial Policy and Production (DIPP) initiated this with the active participation of Union Ministries, Secretaries to Government of India, State Governments, Industry Leaders and various knowledge partners. Their vision and focus was to revive an ailing manufacturing sector and to enhance manufacturing capacity up to 20% of GDP by 2020. Many new sectors were opened up for investments including railways, space and defense. In defense, “Make in India” will play a major role for enhancement of self reliance to upto 70% in a span of ten years. Till date, majority of the defense equipment is being manufactured through ordnance factories and defense public sector undertakings whereas private industry barely is given no major role to play except to fiddle with the undertakings of the public sector.This manufacturing is done either through indigenous developed technologies or transfer of technologies(TOT) from foreign firms. Moreover, the defense budget for the year 2016-17 was 2.58lakh crores out of which, nearly 40% of defense budget is spent on procurement of capital equipment and 15% as revenue for defense stores.
Therefore, the defense sector in India can be seen as a lucrative market for multinational companies for investments and doing business. Hence “Make in India” will be in near future seen as a national program to foster global and domestic investment for international standard manufacturing infrastructure, together with it’s fusion with 21st century technology innovations and human skill and roll out products meeting global standards and competitive price.This will provide employment to younger generation, create infrastructure, develop skills and will meet the immediate requirements of the services. This will also bring in limited high end technology, but at same time, intellectual proprietary rights shall remain with the concerned foreign companies. Therefore, for self reliance in defense sector the concept of ‘Made in India’ would be more appropriate. In ‘Made in India” campaign requirement would be provided by the armed forces, technologies/ systems would be developed indigenously by R&D organization/Academic institutions and productionised through Indian industry.
Hence intellectual proprietary rights shall remain within the country and future upgrades of system shall be possible easily at very low budget. This would also reduce the dependence on foreign companies and pave the way forward for achieving self reliance through indigenously developed technologies to the tune of 70%.At the same time we should remember that self reliance stands on the three pillars of political will, good governance, policies(interpretation and implementation), and stake holders viz Ministry of Defense, Armed forces, R&D organization and production agencies(ordnance factories,public sector under takings and Private sector).To achieve self reliance to the tune of 70%, issues related to these three pillars have to be adequately addressed. Government of India has tried to address the issues related to the three pillars through e-clearance, single window processing accelerated acquisition, review of Defense Procurement Procedures (DPP-2016 already issued) and its alignment with national mission “Make in India”. The Government has also enhanced the limit in Foreign Direct Investment (FDI)in defense sector up to 49% and reviewed off set and TOT policies.
To revert the present indigenous manufacturing to import ratio from 30:70 to 70:30 , a consortium approach taking all stake holders on board in initial stage of future projects has to be adopted. To facilitate this a thorough professional, hard working, efficient, innovative and committed man power has to be deployed for execution of these projects to avoid time and cost overrun. It is heartening to know that the country like India with a total population of approximately 1.25 billion is lagging far behind in Global Competitive Index(GCI), efficiency and innovation from China, USA, Japan and South Korea. As per world economy forum report 2014, in GCI, India ranks at 71st position whereas China and USA hold 28th and 3rd positions respectively among various nations. Also in efficiency and innovations, India’s position among the nations is 61 and 52 whereas China and USA hold 30th, 32nd and Ist and 5th respectively. Therefore, the biggest challenge is to obtain totally committed efficient, innovative and highly skilled man power for execution of the projects under “Make in India” program. This will be possible by revamping the education system (by introducing new job oriented and training courses) and inculcating work culture at work places through incentives and fixing of the responsibilities. In fact, His Excellency Shri Pranab Mukherjee also reiterated this point during his predawn address to the nation on the eve of 68th Republic Day where he advised fellow Indians to work hard for achieving success in a fixed time frame.
The author is of the opinion that if timely corrective steps are not taken by law makers and officials, who are responsible for the execution of “Make in India” campaign in various sectors , there is again going to be cost and time overrun in development of high end critical technologies and manufacturing in the country. India will lag far behind China in many ways.It is pertinent to mention here that after India’s launching of high profile ‘Make in India”, China has also unveiled its “Made in China” 2025 plan endorsed by Premier Likeqlang. The Chinese state media has said that it is the first action plan to tackle the competition from emerging economy like India.
http://www.indiandefensenews.in/2017/02/a-step-towards-self-reliance-in-defense.html
SATURDAY, FEBRUARY 11, 2017 BY INDIANDEFENSE NEWS
by Dr Sudershan Kumar
The “Make in India” initiative was launched by Narendra Modi, Prime Minister of India in September 2014 as a part of his wider initiative towards nation building and making our country self reliant. This “Make in India” campaign was devised to transform India into a Global Design and Manufacturing hub and also a world level manufacturing power house. This campaign was crucial and an imperative response to a critical situation in the year 2013, when the economy was in doldrums and growth rate had fallen to its lowest level and the much hyped economy bubble had burst. The global investors were skeptical and had started debating whether the investment in world’s largest democracy was an opportunity or a risk. At this critical juncture “Make in India” initiative was a powerful galvanizing call to Indian citizens, business leaders, entrepreneurs, to give in their best as Indian nationals. Also it was an invitation to potential partners and investors around the world to endow the country with foreign direct investments and manufacture in India. Most importantly, it represented a paradigm shift in Government’s mindset and its reiteration in providing conducive environment to business partners keeping in view with Prime Minister’s tenet of Minimum Government and maximum governance.
The Department of Industrial Policy and Production (DIPP) initiated this with the active participation of Union Ministries, Secretaries to Government of India, State Governments, Industry Leaders and various knowledge partners. Their vision and focus was to revive an ailing manufacturing sector and to enhance manufacturing capacity up to 20% of GDP by 2020. Many new sectors were opened up for investments including railways, space and defense. In defense, “Make in India” will play a major role for enhancement of self reliance to upto 70% in a span of ten years. Till date, majority of the defense equipment is being manufactured through ordnance factories and defense public sector undertakings whereas private industry barely is given no major role to play except to fiddle with the undertakings of the public sector.This manufacturing is done either through indigenous developed technologies or transfer of technologies(TOT) from foreign firms. Moreover, the defense budget for the year 2016-17 was 2.58lakh crores out of which, nearly 40% of defense budget is spent on procurement of capital equipment and 15% as revenue for defense stores.
Therefore, the defense sector in India can be seen as a lucrative market for multinational companies for investments and doing business. Hence “Make in India” will be in near future seen as a national program to foster global and domestic investment for international standard manufacturing infrastructure, together with it’s fusion with 21st century technology innovations and human skill and roll out products meeting global standards and competitive price.This will provide employment to younger generation, create infrastructure, develop skills and will meet the immediate requirements of the services. This will also bring in limited high end technology, but at same time, intellectual proprietary rights shall remain with the concerned foreign companies. Therefore, for self reliance in defense sector the concept of ‘Made in India’ would be more appropriate. In ‘Made in India” campaign requirement would be provided by the armed forces, technologies/ systems would be developed indigenously by R&D organization/Academic institutions and productionised through Indian industry.
Hence intellectual proprietary rights shall remain within the country and future upgrades of system shall be possible easily at very low budget. This would also reduce the dependence on foreign companies and pave the way forward for achieving self reliance through indigenously developed technologies to the tune of 70%.At the same time we should remember that self reliance stands on the three pillars of political will, good governance, policies(interpretation and implementation), and stake holders viz Ministry of Defense, Armed forces, R&D organization and production agencies(ordnance factories,public sector under takings and Private sector).To achieve self reliance to the tune of 70%, issues related to these three pillars have to be adequately addressed. Government of India has tried to address the issues related to the three pillars through e-clearance, single window processing accelerated acquisition, review of Defense Procurement Procedures (DPP-2016 already issued) and its alignment with national mission “Make in India”. The Government has also enhanced the limit in Foreign Direct Investment (FDI)in defense sector up to 49% and reviewed off set and TOT policies.
To revert the present indigenous manufacturing to import ratio from 30:70 to 70:30 , a consortium approach taking all stake holders on board in initial stage of future projects has to be adopted. To facilitate this a thorough professional, hard working, efficient, innovative and committed man power has to be deployed for execution of these projects to avoid time and cost overrun. It is heartening to know that the country like India with a total population of approximately 1.25 billion is lagging far behind in Global Competitive Index(GCI), efficiency and innovation from China, USA, Japan and South Korea. As per world economy forum report 2014, in GCI, India ranks at 71st position whereas China and USA hold 28th and 3rd positions respectively among various nations. Also in efficiency and innovations, India’s position among the nations is 61 and 52 whereas China and USA hold 30th, 32nd and Ist and 5th respectively. Therefore, the biggest challenge is to obtain totally committed efficient, innovative and highly skilled man power for execution of the projects under “Make in India” program. This will be possible by revamping the education system (by introducing new job oriented and training courses) and inculcating work culture at work places through incentives and fixing of the responsibilities. In fact, His Excellency Shri Pranab Mukherjee also reiterated this point during his predawn address to the nation on the eve of 68th Republic Day where he advised fellow Indians to work hard for achieving success in a fixed time frame.
The author is of the opinion that if timely corrective steps are not taken by law makers and officials, who are responsible for the execution of “Make in India” campaign in various sectors , there is again going to be cost and time overrun in development of high end critical technologies and manufacturing in the country. India will lag far behind China in many ways.It is pertinent to mention here that after India’s launching of high profile ‘Make in India”, China has also unveiled its “Made in China” 2025 plan endorsed by Premier Likeqlang. The Chinese state media has said that it is the first action plan to tackle the competition from emerging economy like India.
http://www.indiandefensenews.in/2017/02/a-step-towards-self-reliance-in-defense.html
