According to sources, industry representatives, who recently met Principal Secretary to the PM Nripendra Misra and plan panel Niti Ayog's CEO Amitabh Kant pointed that "long and inordinate delay in acquisition cycle is making them bleed financially".
Top Indian defence companies have expressed serious concerns over the slow rate of defence acquisition, taking the issue to the doorsteps of the Prime Minister's Office (PMO). This, at a time when Modi government's 'Make in India' and FDI relaxation up to 100 per cent are being seen as game-changers for manufacturing industry.
According to sources, industry representatives, who recently met Principal Secretary to the PM Nripendra Misra and plan panel Niti Ayog's CEO Amitabh Kant pointed that "long and inordinate delay in acquisition cycle is making them bleed financially".
Industry's apprehensions have come even as the Defence Acquisition Council (DAC) – the apex decision making body of the Ministry of Defence (MoD) on new procurements -- has accepted and cleared projects worth more than Rs 3 lakhs crores after the NDA government took over but, none of the projects have converted into contracts.
The industry have asked for 'milestone payments', i.e, payments linked with stage-wise progress on projects as recommended by the former home secretary Dhirendra Singh-led expert committee on amendments in the Defence Procurement Procedure (DPP).
The meeting at PMO comes close on the heels of the industry taking their concerns to defence minister Manohar Parrikar . The meeting with Parrikar mainly concerned finalizing the 'Strategic Partnership Model' (SPM). Once in place, the SPM will open gates for domestic firms to enter into few critical manufacturing like submarines and aircraft on the lines of the Defence Public sector Undertakings and Ordnance Factories.
Among other things, the industry pressed for transparency and clarity on minimum bulk orders so that they could plan their investments in setting up the assembly lines.
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