The Task Force has not extended the principle of Strategic Partnership to the whole gamut of big contracts in which the private sector is supposed to play a major role. And it visualises strategic partners as poor cousins of state-owned entities.
Introduction of the ‘Buy (Indian-IDDM)’ procurement category, the revamped ‘Make’ procedure, structural change in AAP, and higher and flexible indigenous content requirement in certain procurement categories are all likely to deepen the involvement of domestic industry in defence production.
Calculations reveal that the capital expenditure has been cut primarily to accommodate the rise in salary and pension bills arising out of the implementation of OROP scheme and the Seventh Central Pay Commission recommendations.
Research Fellow, IDSA, Dr Laxman Kumar Behera’s article on Defence planning in India, titled ‘Budget 2016: Holistic approach to defence planning is absent in India’ was published in ‘The Economic Times’ on March 5, 2016.
The two heads of expenditure which have witnessed significant growth in the defence budget 2016-17 are the salary component of the armed forces and the defence pensions.
The article assesses the impact of defence offset policy on the Indian defence industry, by taking into account two key parameters—foreign direct investment (FDI) inflows and exports. It observes that the offset policy has a mixed impact. On the positive side, the offset policy seems to have an impact on certain types of exports. On the negative side, the policy has not been a catalyst in bringing in foreign investment and technology inflows into the Indian defence industry, nor has it been successful in promoting its high-end manufacturing.
The Monograph provides a comprehensive roadmap for reforming India’s defence offset policy which despite having gone through several rounds of revisions in past decade or so, still lacks effectiveness. The roadmap is based on extensive study of offset practices followed by six countries: Canada, Israel, Malaysia, South Korea, Turkey and the UAE.
One area where the 2015-16 defence budget is likely to hurt the most is in capital acquisition, which has already been under acute pressure in recent years due to the overwhelming share of the ‘committed liabilities’ arising out of contracts already signed
The ‘Make in India’ drive of Prime Minister Narendra Modi offers a way of improving the country’s self-reliance in defence production. But for the MII to succeed in the defence manufacturing sector, the government needs to address some legacy issues.
Strategic Partnerships: A Critical Overview of the Aatre Task Force Report
The Task Force has not extended the principle of Strategic Partnership to the whole gamut of big contracts in which the private sector is supposed to play a major role. And it visualises strategic partners as poor cousins of state-owned entities.