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Defence Minister Manohar Parrikar on Thursday said that the procurement by defence from SMEs will register growth of 15% in the current year, taking it to Rs 52,000 crore.
Speaking at the inaugural session of the 7th Strategic Electronics Summit 2016 — organised by electronic industries body ELCINA — Parrikar said, “Last year, procurement reached 9%, and in the current year, it will reach 15%. As the volumes increase from Rs 40,000 crore in 2014, to Rs 52,000 crore in the current year, there is more scope for SMEs. It was unheard before,” he said.
He said that the defence PSUs and ordinance board to be lead integrator rather than doing everything by executing projects. “We have projects like LCA Tejas, HTT-40 aircraft and Akash missile system. There will be induction of eight Tejas aircraft this year, and 16, the next year. HAL’s HTT-40 aircraft project has 70 orders for two years, and it will reach 100 aircraft after 2018. We can think of exports after that. The Akash missile system has 80% components outsourced,” he said.
Parrikar pointed that defence PSUs’ outputs are improving every year, and there will be more opportunities. “I have already told that HAL should increase capacity not by putting up more factories, but becoming the lead integrator and giving assembly lines and many products outsourced from the defence industry,” he said.
The Defence Minister also said that the offset policy of the government will also throw up business opportunities of $12 billion to $15 billion.
“Through the ‘Make in India’ campaign, the government wants to promote the larger industry and help them develop its design and manufacturing capabilities in India,” he said.
“I urge industry experts to tell me what needs to be done in a simple format, share your pain-points and bottlenecks. The assurance from our end is that the government will support your initiatives to grow and mushroom,” he said.
Parrikar also pointed that some of the past scams have led to a mindset of suspicion in the ministry that there is a need to get rid of this approach as unnecessary tightening of procedures is hurting the industry and country at large.
“In the last one-and-half-year, we tried to analyse... sometimes it is quite disturbing that because there have been some scams, we have been tightening the screws of the procedures to a level that the basic aspect of procurement procedure or acquisition itself has been forgotten,” he said.
The minister pointed out that once the Request for Proposal (RFP) is issued for defence procurement, changes in it are not allowed because of the suspicion of bribe or foul play. “The assumption that doing something correct will compromise the transparency is not correct,” Parrikar said.
“I have been thinking about how to overcome this situation by changing the procedure, while convincing everyone in defence that still it can be very transparent. You can’t make things foolproof right on day one; you tend to make mistakes,” Parrikar added.
http://www.deccanherald.com/content/556572/defence-buys-smes-grow-15.html
Speaking at the inaugural session of the 7th Strategic Electronics Summit 2016 — organised by electronic industries body ELCINA — Parrikar said, “Last year, procurement reached 9%, and in the current year, it will reach 15%. As the volumes increase from Rs 40,000 crore in 2014, to Rs 52,000 crore in the current year, there is more scope for SMEs. It was unheard before,” he said.
He said that the defence PSUs and ordinance board to be lead integrator rather than doing everything by executing projects. “We have projects like LCA Tejas, HTT-40 aircraft and Akash missile system. There will be induction of eight Tejas aircraft this year, and 16, the next year. HAL’s HTT-40 aircraft project has 70 orders for two years, and it will reach 100 aircraft after 2018. We can think of exports after that. The Akash missile system has 80% components outsourced,” he said.
Parrikar pointed that defence PSUs’ outputs are improving every year, and there will be more opportunities. “I have already told that HAL should increase capacity not by putting up more factories, but becoming the lead integrator and giving assembly lines and many products outsourced from the defence industry,” he said.
The Defence Minister also said that the offset policy of the government will also throw up business opportunities of $12 billion to $15 billion.
“Through the ‘Make in India’ campaign, the government wants to promote the larger industry and help them develop its design and manufacturing capabilities in India,” he said.
“I urge industry experts to tell me what needs to be done in a simple format, share your pain-points and bottlenecks. The assurance from our end is that the government will support your initiatives to grow and mushroom,” he said.
Parrikar also pointed that some of the past scams have led to a mindset of suspicion in the ministry that there is a need to get rid of this approach as unnecessary tightening of procedures is hurting the industry and country at large.
“In the last one-and-half-year, we tried to analyse... sometimes it is quite disturbing that because there have been some scams, we have been tightening the screws of the procedures to a level that the basic aspect of procurement procedure or acquisition itself has been forgotten,” he said.
The minister pointed out that once the Request for Proposal (RFP) is issued for defence procurement, changes in it are not allowed because of the suspicion of bribe or foul play. “The assumption that doing something correct will compromise the transparency is not correct,” Parrikar said.
“I have been thinking about how to overcome this situation by changing the procedure, while convincing everyone in defence that still it can be very transparent. You can’t make things foolproof right on day one; you tend to make mistakes,” Parrikar added.
http://www.deccanherald.com/content/556572/defence-buys-smes-grow-15.html
