DPP 2015 all set to be made public by mid October

The much awaited Defence Procurement Procedure 2015 (DPP ’15) is expected to be made public by mid-October. Defence Minister Manohar Parrikar had told an ASSOCHAM meeting in January this year that all the DPPs of the past were voluminous and complicated. He would like to promulgate a DPP of 25-30 pages by <g data-gr-id="39">March,</g> 2015. <g data-gr-id="38">Thus</g> it can be said that the document is delayed by more than six months.

On top of that, the <g data-gr-id="28">defence-industrial</g> sector is agog with speculation about how the ‘Make in India’ mantra is going to be incorporated in the DPP.

Former senior officials of the ministry like Amit Cowshish says, “All the six categories of manufacturing and procuring defense materials have an element of ‘Make in India’ in the DPP. So how it should be provisioned is being awaited eagerly.”

He says that even the ‘Buy (Global)’ category had a provision for indigenous components to be included.  Additionally, the 2006 DPP had incorporated the ‘Make’ category that had provisions like 80 <g data-gr-id="32">per cent</g> of the total design and development cost of indigenous items to be borne by the government. The rest 20 <g data-gr-id="33">per cent</g> was to be spent by the private manufacturer.

But, despite this generous offer by the government, the Indian private sector majors did not come forward because there was an element of competition. The provision had stated that the ministry will choose two corporates for undergoing the same design and development process and choose one to procure developed items, them based on laid down criterion.

Now, reportedly there is some talk that an Indian major corporate could be made into ‘Strategic Partner,’ which supposedly would bring it at par with the defence public sector companies.

On the defence offsets front, retired Commodore Anil Jai Singh, now working with the private sector says, “The ministry may now allow offsets clause to be fulfilled by investments even in <g data-gr-id="41">non-defence</g> sector. Already, the offsets guideline of 2013 allows the requirement to be fulfilled developing infrastructure projects defense areas, besides bringing in <g data-gr-id="40">second hand</g> equipment.

“Rationalisation of taxation and duties to create a more level playing field between the private players and the DPSUs,” he concludes

Singh says that the industry expects that a “Technology development fund worth Rs 100 crores will be set-up for the medium and small scale enterprises.”