New Delhi, Mar 29 (KNN) After the launch of the much awaited Defence Procurement Policy 2016 on Monday, the Defence Experts have opined that the separate bidding process for MSMEs under 'Make' procedure will not only boost domestic industries but would also make foreign companies bring down their prices.
The ‘Make’ procedure of Acquisition in the DPP gives impetus for MSME sector.
Under the Make-I and Make-II categories, only the MSMEs with certain criteria would be eligible for bidding.
Talking to KNN, PC Tripathi, President, Defence and Strategic Industries Association of India, said, “The domestic companies will benefit from the DPP-2016. India currently imports most of the small items, of around Rs 2,000 crore, from the other countries. Now with the separate bidding for MSMEs, the items will be manufactured in India and the foreign companies too will bring down their process to become competitive.”
Tripathi, however, said that there is a lack of high tech designing technology in the MSMEs.
Meanwhile, Lt Gen Raj Kadyan, Defence Expert, told KNN that India is one of the biggest importers of Defence items in the world. “The procurement procedure here is complicated,” he said adding that the production of indigenous equipment should be started in India.
The separate bidding process of MSMEs under Make will bring more transparency and boost the domestic industries.
Kadyan, however, said that there is a need to speed up implementation of the DPP and procurement procedure in particular. “Earlier it used to take 4 to 5 years, by then the products are already outdated,” he added.
The criteria for sub-categorization of the ‘Make’ programs are - Make-I (Government Funded) and Make-II (Industry Funded).
Projects under the Make–I sub-category, with estimated cost of prototype development phase not exceeding Rs. 10 crore, will be earmarked for MSMEs. However, if at-least two MSMEs do not express interest for a Make-I program of less than Rs. 10 crore, the same shall be opened up for all, under the condition that interested MSME(s), if any at that stage and meeting the eligibility criteria, will get preference over Non- MSMEs in selection of DAs.
Projects under the Make–II sub-category, with estimated cost of prototype development phase not exceeding Rs. 3 crore, will be earmarked for MSMEs. However, if no MSME expresses interest for a Make-II program of less than Rs. 3 crore, the same may be opened up for all, under the condition that interested MSME(s), if any at that stage and meeting the eligibility criteria, will get preference over Non- MSMEs in selection of DAs.
Further, DPP mentions that SHQ would be responsible for undertaking feasibility studies of all projects under AAP – ‘Make.’
The aim of this study would be to identify the projects which Indian Industry has the capability to design and develop, within the timeframe required by the respective Services.
Feasibility studies will be carried out with involvement of all important stakeholders such as HQ-IDS, DRDO, DDP, Advisor (Cost) and MOD (Finance)/IFA as required. Industry associations including MSME associations, OFB & DPSUs may be consulted if considered necessary. SHQ may engage consultants/experts to assist in preparation of feasibility study report. (KNN Bureau)