The fourth tranche of the economic stimulus package announced by the Finance Minister on 16th May 2020 covered eight important sectors of the economy to bring in more investment and job opportunities. It is significant that the defence sector is included in these core sectors. The key takeaway for the defence sector is that the measures proposed are not only to give a fillip to the defence production in the country but also to step up the quality of the weapons and equipment to be manufactured which has long been dogged with subpar production standards which have not able to match global quality.<\/p>\n\n\n\n
The plan to corporatize the Ordnance Factory Board (OFB) is a long awaited reform which was a key recommendation of the Kelkar Committee on \u201cRevitalising Defence Public Sector Undertakings and Ordnance Factories\u201d as far back as 2005.The OFB is the is the oldest departmentally run defence production organisation in the country. It is hoped that corporatization will usher professionalism, better productivity and quality in the Ordnance Factories.<\/p>\n\n\n\n
The announcement of increase in Foreign Direct Investment (FDI) limits from 49 percent to 74 percent under automatic route subject to security clearance should provide the necessary incentive to Original Equipment Manufacturers (OEMs) from other countries to set up their manufacturing facilities in India, especially in the Defence Industrial Corridors in Tamil Nadu and Uttar Pradesh.<\/p>\n\n\n\n
The indigenisation of spare parts for foreign systems already in service will go a long way in ensuring greater self reliance and better serviceability of the weapon systems.<\/p>\n\n\n\n
Another reform which will provide a great deal of visibility in the defence budget as well as a realistic indicator on funds allocated and spent on domestic equipment is a separate capital budget for domestic procurement.<\/p>\n","protected":false},"excerpt":{"rendered":"
The fourth tranche of the economic stimulus package announced by the Finance Minister on 16th May 2020 covered eight important […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[46],"tags":[102,104,105],"yoast_head":"\n