'Firms should help meet Defence needs'

BANGALORE SEPT. 26. Increased private sector participation, particularly from large and high-tech industries, in production of Defence items, was imperative to meet the Defence requirements, the Union Minister of State for Defence, Chaman Lal Gupta, has said.

Addressing a seminar on "Defence procurement — opportunities for small and medium enterprises in Karnataka'', organised by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) here, the Minister said there was need to step up outsourcing from the private sector. In order to facilitate this, the Directorate General of Quality Assurance had set up Vendor Advisory Cells to guide and assist prospective small-scale vendors interested in supplying Defence products.

Defence production, he said, was largely in the public sector which comprised 39 ordnance factories and eight Public Sector Undertakings (PSUs), and about 25 per cent of the purchases made by the PSUs was from the private sector. In value terms, the purchases from the private sector was worth over Rs. 1,100 crore out of the total purchases of Rs. 4,650 crore made by various Defence PSUs during 2002-03. A significant portion of the Defence budget, Prof. Chaman Lal Gupta said, was spent on procuring and supplying equipment to the armed forces.

The purchases by the ordnance factories from the small-scale sector during 2001-02 was Rs. 594 crore and in 2002-03 it was Rs. 550 crore. Hindustan Aeronautics Limited increased its purchases from the small-scale sector from Rs. 81.38 crore in 2001-02 to Rs. 102.45 crore in 2002-03. Similarly, Bharat Earth Movers Limited's purchases went up from Rs. 38.70 crore to Rs. 53.80 crore.

Prof. Gupta said that the Government was committed to effecting changes in the Defence sector and had set up the Defence Procurement Board which had finalised Defence procurement procedures, taking into consideration the requirement of the armed forces in the short, medium, and long term basis. The Defence Ministry had also set up an Acquisition Wing to provide synergy to the acquisition process.

He acknowledged that one of the problems that the industry faced in regard to Defence production was lack of information. To overcome this lacuna, the Ministry was organising constant interaction between the Defence agencies and the private sector.

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