The government takes a shot at procedural reforms to scale up private sector participation in the defence sector
by Naresh Minocha
Stung
by repeated criticism over policy paralysis, the government is set to
perk up private sector participation in the manufacture of defense
equipment.
The
government has, however, no intention to ease the security oversight of
defence production units in the private sector. The security system in
fact would be tightened for which an internal exercise is underway,
according to informed sources. They say that proposed reforms
initiatives have reached an inter-ministerial forum for consultation and
decision.
One such initiative envisages scrapping the
duplication of procedures in grant of letter of intent (LOI)/ industrial
licence (IL) to companies. Duplication of efforts not only delays
clearance of applications but also increases the workload of the
officials concerned.
The
foreign equity cases, for instance, are examined separately both by the
Standing Committee on Private Sector Participation in Defence Production
(SC-PSPDP) in the Ministry of Defence (MOD) as well as by the
Department of Industrial Policy and Promotion (DIPP).
SC-PSPDP
first examines foreign direct investment (FDI) applications and then
forwards its recommendations to the Foreign Investment Promotion Board
(FIPB), Ministry of Finance.
SIPP, which serves as the secretariat for both
foreign investment and IL applications, separately examines the
applications from the foreign investment angle before giving its
recommendations to the Licensing Committee (LC), an inter-ministerial
panel serviced by DIPP.
It is
now proposed to do away with the FDI angle scrutiny of applications by
DIPP. Under the proposed reform, DIPP would strictly go by FIPB approval
and forward the LOI/ IL application to the Licensing Committee....READMORE