Govt moots joint ventures in Defence production

With private participation in Defence production failing to take-off, the government on Monday suggested transfer of technology through joint ventures to Indian private industry for strengthening the country's defence industrial base.

"Since the defence production was opened for private participation under license, 23 letters of intent and licenses have been issued but there is no progress. We are looking in to it," Defence Minister Pranab Mukherjee said at the inauguration of National Expo of Small, Agro and Rural Industries.

"Now is the appropriate time to prepare and work for assisting the Indian private industry, particularly small and medium enterprises, say, by facilitating technology transfer through formation of joint ventures of co-production units," he said.

Mukherjee said this would lead to the strengthening of defence preparedness.

"This will also lead to savings in costs and thus release funds for procurement, besides reducing the outflow of foreign exchange," he added.

The minister said that a high-level committee was constituted in his ministry to review the defence procurement procedures and integrate defence establishments and industry.

"The committee has submitted its report and we are examining its recommendations. An important part of these recommendations relates to measures for promoting the participation of Small and Medium Enterprises in Defence supplies," he said.

Mukherjee said that his ministry was examining policy adjustments so as to provide a level playing field to the domestic industry vis-à-vis foreign bidders in respect of contracts for defence supplies. "I am optimistic that this complex issue will be satisfactorily addressed in the near future."

Mukherjee is heading the Group of Ministers which is examining the recommendations of the Parliamentary Standing Committee on the Small and Medium Enterprises Development Bill.

"In our deliberations on the Bill, we will take adequate care to see that the concerns voiced by the vast majority of tiny and micro enterprises are adequately addressed," he said.

In its review of the Bill, the standing committee had pointed out that it restricts itself to the small and medium enterprises and does not deal with the tiny sector.

Mukherjee said the recommendations of the GoM would soon be placed before the Cabinet so that the Bill, which was introduced in the Budget session, was passed in the Winter session of Parliament.

Earlier addressing the gathering, Minister for Small Scale Industries and Agro and Rural Industries Mahabir Prasad said the promotional package for the small and medium sector would be announced in a few months.

He said the notification for simplification of Credit Linked Subsidy Scheme for the SSI sector would be made soon.

Prasad hoped that the Rs 100 crore Scheme of Fund for Regeneration of Traditional Industries would serve its intended purpose.