MoD:Defence Procurement Policies Issues and Discussions

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby nam » 01 Nov 2017 02:35

A very interesting video, specially the talk by Data Patterns MD. He tells how the industry cannot own the IP, even if it was created by them!


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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Gagan » 03 Nov 2017 21:25

X Post:
Funding programs is the product of lengthy program studies, with expected costs included each step of the way. It can't be any other way, otherwise CAG will breathe fire.
This probably has to be submitted in triplicate,

Funds release after jumping through a series of minefields at the MOD and MOF and Once a month meeting of the defence minister (If the defence minister is in town on the fateful day, and if the agenda for the meeting is not otherwise full for the meeting) is a another hoop to jump through.
If the defence minister is out of town, or if someone pushes some other procurement related item into the agenda for the day, this will again get shafted to the next month.

The timeline given above are just approximations.

The Babus, play havoc by quoting the rule book and styming and delaying everything - EVERYTHING, to the fullest extent of their abilities. The babus get a rash, the moment they see a uniformed officer or jawan. The sight of an upright person, who is willing to lay down his life for the nation does not go too well with a potbellied, lazy, inefficient and corrupt babu.

UPA defence ministers are sent in with one agenda - fill the party's coffers for the next election. Period. Running the ministry is only incidental.

Put everything into the mix, and one should be grateful that things even get approved at all !

Once approved, the ministry will refund unused funds to the min of finance.

At the DRDO level, tendering is a triplicate process involving all sorts of laws and bylaws, including contract negotiation (likely even or a ball point pen) and avoiding a single vendor situation - I'll bet they don't procure ball point pens if only one supplier responds. God help us all !!!!!
Programs are R&D, and so unexpected things and problems crop up. This arachic system is just not geared to handle this, and funding, procurement, equipment supplies all get in the way of running a smooth program.

Case in point - when HAL paid for the HHT-40 out of its own finances, see how quickly the program came to first flight! They were able to bypass many of these steps.

(Apologies in advance for the typos - my computer has surely been taken over by the Chinese or the NSA, and is buggy and slow)

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby nam » 03 Nov 2017 23:41

With HAL getting listed, hopefully they don't have to go to MOD for things like 1500 crores for setting up second lines. I really hope HAL invests the market funds in improving it's R&D and speeding up production capabilities.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ShauryaT » 09 Nov 2017 07:55

Indian Army builds defence against outdated technology

The move to amend defence procurement manual (DPM) by adding a separate chapter on tech products — a long standing demand of the industry — will significantly speed up the process of the defence forces procuring and implementing the latest technology, people aware of the development said. At present, defence procurement takes years, sometimes up to a decade, they said.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 09 Nov 2017 08:01

Adding more paper wont solve the real problem of file pushing and delays.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby JayS » 09 Nov 2017 11:56

nam wrote:A very interesting video, specially the talk by Data Patterns MD. He tells how the industry cannot own the IP, even if it was created by them!



I have pointed this exact same issue when that GTRE new Fan development tender came out. They wanted to retain all the IP. That's a ridiculous expectation. No one is gonna come to work with hi tech JVs if DRDO/HAL has such idiotic conditions. Even HAL's tenders for HTFE/HTSE have had such conditions which would be unacceptable to private companies. Now I am sure many private companies themselves do the same think while putting tenders out. But defense is special area and it needs to be dealt with in a different manner. When you have a proper MIC with Tier-1/2/3 companies its easy to deal with IP issues because in such case OEM can off-load modules fully to the Tier1/2 companies who do not have to share any technology with OEM, all they have to do it supply manufactured product which satisfies all technical specifications. We don't have it. So what we need is DRDO/DPSUs to let go IP. That's a way of government subsidizing the MIC creation. GOI has to do it.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 25 Dec 2017 16:42

one kumbh mela happened. As usual No coverage from DD media
(Posting for info only )
INAUGURAL SEMINAR ON SOLUTIONS TO PROBLEM STATEMENTS

https://indianarmy.nic.in/makeinindia/P ... t%2017.pdf

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 25 Dec 2017 16:44

https://indianarmy.nic.in/makeinindia/M ... %20New.pdf

second Seminar on ‘MAKE’ projects for Indian Army is being held on 12 Aug 17 at India Habitat Centre, Lodhi Road, New Delhi jointly under aegis of Indian Army and CII.
( old one MBD - if -RP)

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby JayS » 10 Jan 2018 11:51

Presentation by HAL on "Procurement and Vendor Development". Info on HAL's strategy of outsourcing, processes, and some examples that they want to out-sources and some success stories.

http://www.hal-india.com/Common/Uploads ... eminar.pdf

Lot of other interesting stuff here. Processes, systems/components available to take up and more.

http://www.hal-india.com/Make%20In%20India/M__273

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 14 Jan 2018 22:07

https://mod.gov.in/sites/default/files/payallow.pdf

hi all,,,, came across one love letter on MOD website.

PAY and allowances of retired / released armed forces officers on re-employment in armed forces.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 22 Feb 2018 07:11

Vidur while googling for UK Defense procurement practices, I came across a cross-examination of Sir Peter Spencer KCB, who was the official in charge of the Defense Procurement Agency to implement Smart Acquisition during Iraq war. The inquiry was due to shortfalls in ammo etc.

He gives a scathing review of the lapses he found in MoD in the DPA.
In short, he found lack of project management skills in the people, lack of interface with the military people using the products, and a big issue of 'conspiracy of optimism' or chalta hai attitude that things will work out all right in the end.

The big issue was not facing up to the true cost of some very ambitious programs.

Do look for Peter Spencer Iraq hearings as keywords.

Link to help you:

http://www.iraqinquiry.org.uk/media/235 ... pencer.pdf

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 23 Feb 2018 10:40

this belongs to this thread...
https://www.mod.gov.in/sites/default/files/firmshold.pdf
Details of Firms debarred/put on hold/suspended


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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 26 Feb 2018 23:59

Is there a copy of that report on line?
I would like to read for myself without spin.

Its a fluff piece as it used a LM slide to advertise the F16-Blk 70 pitch.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rakesh » 27 Feb 2018 05:48

Ramana-ji: I have found only one page of the report and that too, chopped! :)

Image

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 27 Feb 2018 14:18

http://pib.nic.in/newsite/PrintRelease. ... lid=176815

Press Information Bureau
Government of India
Ministry of Defence
27-February-2018 12:34 IST
Work on Tamil Nadu Defence Quad Begins

As per the guidance of Raksha Mantri Smt Nirmala Sitharaman, the work for preparing Detailed Project Report(DPR) for the Tamil Nadu Defence Quad has been initiated by Department of Defence Production in the Ministry of Defence(MoD). The Department will engage a top consultancy firm to draw up the DPR for the Quad.



The Finance Minister Shri Arun Jaitley in the Budget 2018-19 announced setting up of two Defence Production Corridors. Further, it has been decided that one of the Defence Production Corridors will be set up in Tamil Nadu. The corridor, which is organized as a quadrilateral will extend from Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli. It is therefore rightly called the Tamil Nadu Defence Quad. It is expected that with government opening up new opportunities for industry in defence sector, the Tamil Nadu Defence Quad will provide a major opportunity to the vibrant manufacturing sector in the State.

Further, to ensure that the expectations of local industry, especially MSMEs is incorporated, to the extent appropriate, in the proposed development of the Quad, the MoD has initiated an exercise of industry interactions at all nodal points for the Quad, namely Chennai, Hosur, Coimbatore, Salem and Tiruchirappalli. These interactions will involve senior officers from MoD, representatives of Hindustan Aeronautics Ltd., Bharat Electronics Ltd., Bharat Earth Movers Ltd. and Ordnance Factories. These interactions are being organized with the active participation of the local Small Scale Industries Associations and the State Government representatives. The interaction has already begun with the first one held at Hosur on February 26th, 2018. The dates for other interactions are as follows:

Coimbatore - March 5, 2018
Salem - March7, 2018
Chennai - March 10, 2018


The dates for Tiruchirappalli will be announced separately. All industrialists interested in defence sector are invited to participate in these interactions and provide inputs for shaping the contours of the proposed plan for Tamil Nadu Defence Quad.

SRR/NAo/Rajib/HS

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 27 Feb 2018 23:59

I really would like to see the MoD report on procurement bottlenecks.

Meantime X-Post....

Will wrote:
Rakesh wrote:


How long did it take the geniuses in the MOD to figure that out. Why is action not being taken against those responsible for delays in indigenous procurement. The simple reason is that everyone has a finger in the import pie. :evil:

Indian bureaucracy can kill any project. I remember George Fernandes saying that arms dealers were too deeply entrenched. When the defense minister of a country says that, you can imagine how serious the problem is. AK Anthony only had ideas about indigenisation but did not have the gumption to make things happen. The present govt has laid a big bet on make in India but in a totally wrong context. Playing musical chairs with regards to defense ministers in an important ministry like defense hasn't helped. The MOD needs to be restructured. Get rid of the bureaucrats and get in technocrats. Get a small team in with a dedicated focus on procurement. Whichever party is in opposition will always try and make a noise , shouting "scam",its nothing new. Every party when in opposition does it. But whichever party is in govt needs to have the guts to take tough decisions to meet the requirements of the country.

Also, the MK 2? Is it still a project anymore? No one, including the IAF, ADA or the govt has talked about it in years. :roll:


I looked at the Sir Peter Spencer cross examination on what ails the UK MoD Defence Procurement Agency (DPA) and I see that Indian MoD is thousand fold magnified for underlying all this is the Congress culture of scamming defence procurements to fund the Congress party and later on personal enrichment from the lowest clerk to the Congress leadership.

I think what's needed is a Business Process mapping of the whole defence procurement process and see where the bottle necks are and try to remedy them.
Unfortunately the CAG instead of being a honest watchdog is staffed with useless auditors who have no idea what they are auditing. The MPs committee has no clout to seek reforms.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rakesh » 28 Feb 2018 00:02

Ramana-ji, nothing will change unless the bureaucrats make the change themselves. Will's idea - while laudable - cannot work. When you have power over billion dollar deals, why will you relinquish that power? Govts cannot make the change either. They would not know where to start. The mindset needs to change and that can only start with the Babu himself/herself.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 28 Feb 2018 00:12

No. The babus don't create policy. They implement it. Its the ministers who create policy.
Unfortunately they don't have enough tenure to create policy.
The babus wont budge knowing the minister will get shuffled.

Dr. Bhamre seems to have understood the MoD Procurement hurdles and has even suggested ways to overcome them.
We need to ensure he stays to implement them.

DRDO has a Systems Engineering/Analysis Lab in Delhi.
Its about time that MoD used their expertise to look at this policy and have them advise.
Calling outside consultants who don't have skin in the game is futile.
All it does is produce thick reports which we get from CAG and parliament anyway.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 28 Feb 2018 00:59

MoD Technology Perspective and Capability roadmap:


https://www.mod.gov.in/technology-persp ... ty-roadmap

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rakesh » 28 Feb 2018 01:55

ramana wrote:No. The babus don't create policy. They implement it. Its the ministers who create policy.
Unfortunately they don't have enough tenure to create policy.
The babus wont budge knowing the minister will get shuffled.

You are correct. But let us take the policy of Make In India for Defence for example. That failed miserably and the reason being is the Babus got their hands on the policy and ruined it. The SEF is the only purchase that worked in India's favour. But a whole host of other programs (minesweepers for the Navy come to mind) got mired in bureaucracy because of babudom.

For example, someone who was working in Agriculture Ministry (until last month and dealing with import/export of grains) gets moved to Defence Ministry and follows the same process. He/She does not care. They follow everything as per the rule book. Pension is at stake after all. For the Babu, importing grains = importing defence products. With that kind of process in place, nothing will move. See below...

Adding more value to India's Babudom
http://www.dailypioneer.com/columnists/ ... budom.html

Moreover, over the years, a budding young IAS officer may be involved in activities varying from district administration to animal husbandry, health, agriculture, finance, space, science and technology and highways to transport, and end up a couple decades later being jack of all trades but master of none.

The Shekatkar Committee had recommended CDS (single point of contact). That has still not been done to date. When the services need a particular platform, the CDS must make that case to the Raksha Mantri and provide solutions for the quickest induction method. If G2G is that option, then the CDS and Raksha Mantri needs to implement it. Get the Babu involved, but only in areas where is necessary. What is happening now, is one service (air force) wants fighters and another service (navy) also wants fighters. Both are fighting each other (turf war) and nothing moves. Then MoD comes in and says, we will hold a competition (which eventually goes no where) and then the reset button is pressed and we start anew. Now if we had a single point of military contact - like a CDS - they can make the recommendation to acquire one fighter type (Rafale or F-35 for example) and everyone wins. Cheaper because of one type, easier to maintain because of one type, upgrades are easier because of one type, same weapons across both platforms because of one type and the list goes on.

But no, we will do competition onlee because the Babu says so. And then every Tom, Dick & Harry OEM gets invited and they each tout their wares, each country talks about strategic partnership and value of partnering with them, then the MoD starts with life cycle costs, this cost, that cost and then the Finance Ministry gets involved and says no to this cost and re-calculate that cost. Then the file goes back and it goes in a cycle of rebirth. When it leaves each desk, it is reborn into a different avatar from when it landed on that desk. Utter bakwaas our procurement system is. And when the Raksha Mantri is asked - they all have one standard answer (Saint Antony was famous for it) - as to why there are delays, "No expense shall be spared in the security of the nation. This government will see to that." :roll:

If we were having this conversation in person, I would have done a perfect impression of Saint Antony (with Malayalee accent) :lol:

On the new fighter acquisition issue, they should stop this multi-vendor situation and go in for G2G deal. Not possible now, but post elections they should be looking into that. A protracted competition only delays the acquisition. And the IAF suffers as a result.

Q. What did George Fernandes do? Walked around with a notepad and a pen/pencil and took down notes at the micro level (jawan, sailor, airman). But could not change anything at the macro (ministry) level.
Q. What did Saint Antony do? The less said the better. He needs to be given Nishan-E-Haider for services rendered to Pakistan.
Q. What did Arun Jaitley do in his first tenure as Raksha Mantri? He was more interested in being Finance Minister.
Q. What did Manohar Parrikar do during his tenure? He talked and talked and talked. He opened his mouth on things, he had no business talking about. Nothing happened, other than giving the import lobby on BRF wet dreams about F-Solah and Rakhi Sawant (F-18).
Q. What did Arun Jaitley do in his second tenure as Raksha Mantri? Same as first tenure onlee.

ramana wrote:Dr. Bhamre seems to have understood the MoD Procurement hurdles and has even suggested ways to overcome them. We need to ensure he stays to implement them.

I hope he does. I really do.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 28 Feb 2018 03:10

Rakesh its not like that.

District administration is one of the most challenging tasks in India and the officer hones his skills as he is sole authority and has to develop mastery over multiple aspects: law and order, administration, agriculture, irrigation, R&B , health, people welfare etc. From there they go to State level or central level as Dy Secy based solely on merit after around 10 years from date of entry. After some time there they go back to State fro empanelment for JS position. This is the most crucial posting as the officer is directly in charge of many people and is responsible for day to day running of his department. All above him like Addl, Secy etc have JS under them. So its the JS level officers who have to implement the policy. Along the way they get one year study leave if its in UK or more if its US based on courses pursued. Many go and get PhDs so they can deal with specialized topics. That Pioneer article is nonsense. Its written with half knowledge. The generalist training allows cross-discipline/cross-functional synergy. The specialists who stay in the dept report to the JS. Its that level that has to be better trained. The biggest fear is the CAG audit finding for that marks the end of the career. BTW the Agriculture guys is moved toe MoD for that is where he might have served as Dy Secy.

Now lets come to the Expert committees. Reason why they fail top get implemented is they violate Chanakya's dictum on seeking advice from ministers who don't have to implement their advice usually give incorrect advice. So calling outside committee of experts is passing the buck to avoid dealing with issue. Even KS garu forgot this and suggested a lot of things in KRC. I pointed out the GOI has its own huge intelligence assessment setup which is the giant bureaucracy and is not limited to narrow fields. I have already made my points about the CDS in the CDS thread. Once upon a time I too thought such a position is needed but in reality its not need in India. The cons are more than the pros.

And the service chiefs are perfectly capable of making the case directly to the PM even as needed. Recall ACM Raha explain the Rafale need to PM Modi directly with no other intermediary except to take notes.


I think India had two good RMs
- Y.B. Chavan
- Jagjivan Ram
- Third one will be Nirmala Sitraman

Now why did #MII fail.

Please read these requirements for 2018. Look at technology, quantities and products.....

ramana wrote:MoD Technology Perspective and Capability roadmap:


https://www.mod.gov.in/technology-persp ... ty-roadmap



And lets discuss them after you read the 2018 roadmap.....

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ShauryaT » 28 Feb 2018 07:15

ramana: KS garu recommended the NDU to be the training ground for a committed civilian cadre in the KRC. I believe that is the correct way forward, not only for defense but in other areas of administration as appropriate. Specialization has to set in the process early on, it is somewhat reversed now and except for a few areas, specialization is by chance and not by design. You are also correct that it is the JS level who need to be experts and experienced in handling their respective areas. Health, Urban Planning, Agriculture each of these deserves their committed base and in that sense, state capacity needs to be built up.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 06 Mar 2018 09:45

Setting up of Investor Cell Defence in the Department of Defence Production
http://ddpmod.gov.in/sites/default/files/Office%C2%A0Order%20For%20Defence%20Investor%20Cell.pdf

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Philip » 06 Mar 2018 10:15

Ramana, I remember quoting from it at the time.
There was another beauty which said that he never felt amazed when weapon systems came late, at extra cost and lower performance specs than ordered for! Sounds quite familiar in our part of the world too!

Reg IP.One poor pal of mine developed blisks for the DRDO some years ago.Meant for Kaveri. Not a single order to date and becos of some paltry funding can't sell his tech to anyone else.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 07 Mar 2018 02:02

X-post..
Prem Kumar wrote:This is where we must take a leaf out of the China playbook. To their credit, they identified technologies/materials (like Rare Earths) that were strategic and ruthlessly went after them. Controlling/buying-out means of production, bankrupting competitors etc. Now China produces most of the world's rare earths, whereas a few decades ago, they were nowhere in the game.

The GOI (CCS), DRDO and Indian Industry must prepare a 2 decade plan for strategic technologies, materials, hardware/software etc that we MUST pursue whether its economically viable or not. Then go after it ruthlessly. Every adharmic means should be pursued if need be. Industrial espionage, hacking, kidnapping, reverse-engineering, secret-Govt-funded buyouts of strategic-but-struggling foreign firms, bribing leaders etc etc.

That's the only way to play this game.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 13 Mar 2018 14:12

CREATION OF SEPARATE PORTAL FOR DEFENCE PROCUREMENT ENTITIES

https://defproc.gov.in/nicgep/app

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 13 Mar 2018 14:26

Make-II Procedure(16) 'Make' procedure which was introduced initially in 2006, provides for collaborationbetween Government and private Indian Industry for indigenous design, development andmanufacture of defence equipment. Two sub-categories viz. 'Make-I' & 'Make-II' wereintroduced in 2016. Make-II procedure is for projects of prototype development withoutGovernment funding. As a major boost to 'Make in India' in the defence sector, the DefenceAcquisition Council (DAC) on 16th January 2018 cleared a simplified 'Make-II' procedureafter a series of consultations with the industry. Salient features of the simplified procedureare as follows:
• Inviting suggestions for project from the industry, start-ups and individuals,especially in respect of items which are currently being imported;
• Approval of project by a collegiate comprising DRDO, HQ (IDS), DoD under aCommittee chaired by Secretary (DP);
• Hosting of Expression of Interest (EoI) in respect of approved projects on MoDwebsites;
• No limit on number of industry players who may show interest and offer aprototype;
• Issue of RFP. RFP once issued, will not be retraced. The winning bidder is assuredof an order;
• Service HQrs to constitute a project facilitation team to facilitate the process;
• Case to be progressed even if only one entity has offered an innovative solution;
• Industry which develops the project will retain the title, ownership and IPR (exceptfor specified reasons like national security);
• Normally no negotiations in multi-vendor contracts

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 13 Mar 2018 18:30

Ministry of Defence12-March, 2018 15:34 IST
Strategic Partnership Model in Defence Acquisition

The policy on Strategic Partnerships in Defence sector was approved by Defence Acquisition Council (DAC) in May, 2017. It was promulgated on 31.05.2017 as Chapter-VII of Defence Procurement Procedure (DPP) – 2016 titled as ‘Revitalising Defence Industrial Ecosystem through Strategic Partnerships’. The policy was placed before the Cabinet Committee on Security (CCS). The CCS considered the Note on the Policy in its meeting held on 24.05.2017 and noted the contents thereof. The chapter was uploaded on Ministry of Defence website: https://www.mod.nic.in.



The policy is intended to institutionalise a transparent, objective and functional mechanism to encourage broader participation of the private sector, in addition to DPSUs / OFB, in the manufacture of defence platforms and equipment such as aircraft, submarines, helicopters and armoured vehicles. It will serve to enhance competition, increase efficiencies, facilitate faster and more significant absorption of technology, create a tiered industrial ecosystem, ensure development of a wider skill base and trigger innovation, leading to reduction in dependence on imports and greater self-reliance in meeting national security objectives. The following four segments have been identified for acquisition under Strategic Partnership (SP) route:

Fighter Aircraft
Helicopters
Submarines
Armoured Fighting Vehicles (AFVs) / Main Battle Tanks (MBTs).

The Strategic Partnership Model (SPM) is a different category of Capital Acquisition in addition to the existing categories as mentioned in Chapter-I of DPP-2016 i.e. ‘Buy (Indian-IDDM)’; ‘Buy (Indian)’; ‘Buy & Make (Indian)’; ‘Buy & Make’ and ‘Buy (Global)’.

The amount of investment and employment opportunities likely to be created cannot be quantified at this stage as the cases in the respective segments are at their initial / early stages.

This information was given by RakshaRajyaMantriDr. Subhash Bhamre in a written reply to Shri C.M. Ramesh in Rajya Sabha today.

***

NAo/Nampi/Rajib/HS


(Release ID :177295)

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 13 Mar 2018 18:32

Ministry of Defence12-March, 2018 15:33 IST
Privatization of Defence Production

The Government is promoting privatisation in Defence Production. Till February 2018, Department of Industrial Policy & Promotion (DIPP) has issued 348 licenses to 210 Indian Companies for manufacture of various licensable defence items. Apart from this, one manufacturing license has also been issued by Ministry of Home Affairs for Small Arms and Ammunitions. Till February 2018, 70 license companies covering 114 licenses have reported commencement of production.

The Government has partially withdrawn the public investments in respect of Defence Public Sector Undertakings (DPSUs) Bharat Electronics Limited (BEL) and BEML Ltd. The Government shareholding now in above DPSUs is 66.72% and 54.03 % respectively.

As per extant Foreign Direct Investment (FDI) policy, in defence sector, foreign investment upto 49% is permitted under automatic route. Foreign investment beyond 49% (upto 100%) is permitted through government approval in cases resulting in access to modern technology in the country or for other reasons to be recorded. FDI limit for defence sector has also been made applicable to Manufacturing of Small Arms and Ammunitions covered under Arms Act 1959. Further, foreign investment in defence sector is subject to other conditions of extant FDI Policy as amended from time to time.



So far, 40 FDI proposals / Joint Ventures have been approved for manufacturing of various defence equipment both in public and private sectors.

This information was given by RakshaRajyaMantriDr. Subhash Bhamre in a written reply to ShriNeerajShekhar and Shri Ravi Prakash Vermain Rajya Sabha today.

***

NAo/Nampi/Rajib/HS


(Release ID :177294)

jaysimha
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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 13 Mar 2018 18:33

http://pib.nic.in/newsite/PrintRelease. ... lid=177291

Press Information Bureau
Government of India
Ministry of Defence
12-March-2018 15:30 IST
Establishment of Defence University

There is a proposal to establish Indian Defence University (IDU) as a fully autonomous institution under an Act of Parliament to impart training and education on defence and strategic studies. The estimated expenditure on establishment of IDU has not been finalised.
The academic session will commence after the passage of the proposed legislative enactment for establishment of IDU.

This information was given by Raksha Rajya Mantri Dr. Subhash Bhamre in a written reply to Shri Dr. Vikas Mahatme in Rajya Sabha today.

NAo/Nampi/Rajib/HS

ramana
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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 13 Mar 2018 21:11

I hope it will be called Marshal Cariappa Defence Uty. Time to honor the armed forces. Earlier I thought of KS garu, but a Defence Uty should be named after military personnel. The school for strategic studies can be named after KS garu.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 13 Mar 2018 21:14

Vidur, Can you take a look and help us identify which areas can be reduced and eliminated? For example, can we combine the CFA approval phase? Right now it shows a serial process which adds delays and gaps.
This way we can have a concept paper on MoD procurement process reform.

Karan M wrote:Image


Am asking you as you would have insight from the trenches so to speak.

ramana
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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 13 Mar 2018 21:15

KaranM, Can you add up the minimum time and max time for the whole process and put that on the graphic?

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby jaysimha » 14 Mar 2018 11:03

Ministry of Defence, Government of India is desirous of procuring quantity
60,000 (approximately) Individual Protection System. This Questionnaire has
been called from vendors with the view to identify probable vendors who can
undertake the said project under ‘MAKE’ category as explained in Chapter-III of
DPP-2016. OEMs/ Vendors are requested to forward information on the product
which they can offer
https://indianarmy.nic.in/makeinindia/Indl%20Protection%20Systemp.pdf

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rahulsidhu » 16 Mar 2018 01:32

While reading some debates over importing weapons vs sourcing locally, I thought I'd do a rough quantitative economic analysis comparing the two (since I've never seen it anywhere):

I am assuming
* fiscal multiplier = 2.0, which IMO is quite reasonable for this kind of spending. The fiscal multiplier is the ratio of the total GDP increase to the amount of spending done. E.g GoI buys planes from HAL, HAL pays its suppliers and employees, who in turn spend it on other things.
* Net taxation = 15% which is about our Tax/GDP ratio.

Scenario 1: GoI spends Rs. 100 on importing a weapons system. There is a mandatory 30% offsets clause.
Net GDP impact = -100 + 30*2 = -40
Net fiscal impact = -100 + 30*2*0.15 = -91

Scenario 2: GoI spends Rs. 100 on a locally produced weapon. 100% of sourcing is local.
Net GDP impact = 100*2 = 200
Net fiscal impact = -100 + 100*0.15 = -85

This is something that must be considered in a fiscally-constrained environment: if there were ever a case to be made for fiscal stimulus, local weapons R&D and production are one of the best targets for it. The money spent boosts the economy, some of it even comes back to the govt. as taxes. Hopefully it also pushes domestic R&D and helps the industrial base.

On the other hand, imports actually curtail the economy, since the weapons imported are not capital assets as such.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 16 Mar 2018 02:02

last number for net fiscal impact is +85 vs -91?
That's the number to look at.

And also the Rs. 100 in India will have a multiplier effect in the economy right? A whole bunch of people down the supply chani get paid.

I was told multiplier is about 8-12 times.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rahulsidhu » 16 Mar 2018 02:18

^^ No it is -85. This is the net amount of spend by the govt.
the GDP impact of +200 takes into account the multiplier (100*2)

I agree fiscal multiplier of 2 seems conservative. A higher value will make an even stronger case for domestic stuff.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby ramana » 16 Mar 2018 03:29

Ok Got it.
Also now understand the case for imports. Its marginal savings of (91-85) 6.
And politicians get kick back the whole chain of decision makers get fiesta.
In reality India gets value of maybe Rs. 60 for the Rs. 100 spent.

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Re: MoD:Defence Procurement Policies Issues and Discussions

Postby Rakesh » 16 Mar 2018 05:39

LONG OVERDUE!!!!! Let's hope it gets implemented.

Compulsory military service for those seeking govt jobs, says Parliamentary Standing Committee
https://www.indiatoday.in/india/story/c ... 2018-03-14

Compulsory military service for those who want a subsequent employment with the government is being considered by the Department of Personnel and Training (DoPT) - a wing of government that reports to the Prime Minister. The wing is tasked with administering and making policy for all government servants.

The Parliamentary Committee has also asked the Ministry of Defence to push with the DoPT with more vigour and earnestness. Apparently, the Ministry of Defence has not taken up the matter with due seriousness.

^^^^ Major Gaurav Arya (retd.) has this to say about the above plan, via a tweet...

https://twitter.com/majorgauravarya/sta ... 0517656576 ---> Fantastic Plan. One year of “hell” in OTA will change blood group to OG+. After passing out, let them serve in Kashmir, North East or Siachen with an infantry, armoured or arty unit followed by an RR tenure. THEN let them join Center/State Govts.


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