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'Pvt firms to produce armaments'

Defence Ministry proposes to permit select pvt industries to receive tech from abroad in defence sector.

india Updated: Jun 09, 2006 15:08 IST

In a major move to spurt larger private sector participation in advanced armament production, the Defence Ministry on Friday announced that it proposes to permit select private industries the right to receive technology from abroad in defence sector.

Such companies would be conferred the status of "Raksha Udyog Ratna" Defence Minister Pranab Mukherjee said on Friday.

They would be treated at par with Defence Public Sector Undertakings for selection of transfer of technology from overseas sources and allowed to assume the role of system integrators of large weapons systems and producers of weapons platforms, the Minister said.

Mukherjee said a selection committee had recently been set up for selecting Tier I industries to be known as Raksha Udyog Ratnas.

Lamenting that since 2001, when the Defence sector had been opened to private participation, the response so far had been dull, the Defence Minister said Government wanted to trigger a much wider private sector participation and infusion of investments and resources so that the strain on exchequer was reduced on defence spending.

The government announcement could not have been timed better with lucrative Defence contracts worth billions of dollars in the offing in purchase of futuristic fighters, heavy calibre artillery guns, ground to air missiles and purchase of Nuclear and Biological radiation proof clothing.

"Only Tata's and Larsen and Tubro have ventured into defence fields so far and their initiation into the field of defence technologies has been boon-full for them", the Defence Minister said.

Outlining that in order give fillip to country's defence industry an offset provision had been incorporated in defence purchases, Mukherjee told the private as well as public sector undertakings to capitalize on offsets.

"The attempt should be to bring in investment in terms of new technologies rather than cater to the market forces", the Minister told the industry saying that the policy would open up new avenues for growth within the country in terms of industry participation, technology up-gradation and employment opportunities.

Though Defence PSUs and Ordnance factories have been able to meet the requirements of the armed forces to a large extent, Mukherjee said still India's major part of demand from armed forces was being met through imports.

He also told the Defence PSUs to adjust and adapt to the changing business environment due to globalisation and take steps to tap the country's rich resources in trainer manpower and large pool of scientists and engineers.

On the occasion, the Defence Minister also gave away awards to defence scientists, engineers for breakthroughs in developing weapons technology.

HAL also received the award for best performance in exports. Among the Defence PSU's Bangalore-based Bharat Electronics was adjudged the best performing division, the best performing Ordnance factory went to Ordnance factory at Chanda.

HAL'S ARDC division won the import substitution award for developing mission computers for aircraft and helicopters, while Chennai-based BEL division won the design award for developing land navigation system and Hyderabad-based MELT division of Midhani plant bagged the Innovation award for developing and manufacture of indegenious gun for MBT, Arjun.

First Published: Jun 09, 2006 14:51 IST