Page 461 - ES 2020-21_Volume-1-2 [28-01-21]

88 Economic Survey 2020-21 Volume 2

iv. Contractual Enablement. Buyer’s Right to optimize Life Cycle Support costs and
system enhancements through indigenous eco system incorporated.
c) FDI in Defence Manufacturing: With the announcement of new FDI Policy, suitable
provisions have been incorporated like new category ‘Buy (Global – Manufacture
in India)’ done to encourage foreign OEMs to setup ‘manufacturing/ maintenance
entities’ through its subsidiary in India while enabling requisite protections to domestic
industry.

d) Time Bound Defence Procurement Process and Faster Decision Making: As part
of the Defence Reforms announced in Atma Nirbhar Abhiyan, setting up of a PMU
has been mandated to support contract management. The PMU will facilitate obtaining
advisory and consultancy support in specified areas to streamline Acquisition process.

• Ease of Doing Business: One of the key focus areas of the review was to implement
‘Ease of Doing Business’ with emphasis on simplification, delegation and making the
process industry friendly with certain specific provisions like Single stage accord of
AoN in all cases up to ` 500 crore to reduce time.
• Make and Innovation:

a) Make I (Government Funded up to 70%)- Laying down a cap of ` 250 crore /DA
and selection of DAs based on bidding criteria.

b) Make II (Industry Funded) for production of indigenously designed & developed
weapons/equipment/systems/platforms along with sub components/assemblies.
c) Make III (Indigenously Manufactured) category for manufacture of equipment/
platforms or spares/assemblies/sub-assemblies for enabling import substitution.
d) Procurement of prototypes developed through ‘Innovation’ under various initiatives
like iDEX, Technology Development Fund and Internal Services Organisations
has been facilitated.

• Offsets: The Offset guidelines have been revised, wherein preference will be given to
manufacture of complete defence products over components and various multipliers
have been added to give incentivisation in discharge of Offsets.
Self- Reliance in Defence Production:

To achieve self-reliance in the defence sector and make India a global hub in defence
manufacturing the Ordnance Factories (OFs), Defence Public Sector Undertakings (DPSUs)
and the private industry ecosystem have enhanced their capabilities and widened the product
range. A large number of major products have been developed through R&D initiatives and
through transfer of technology. As a policy, DPSUs and OFs have been outsourcing many of
their requirement, the value of outsourcing in terms of value of production for the FY 2019-20
stands at 41.70%. Further over the years a wide vendor base has been developed that includes
a large number of medium and small scale enterprises and large scale industries. In addition,
the DPSUs and OFs are also striving to increase the indigenous content in the equipment’s
and products manufactured by them. The indigenous content (Degree of Indigenization) as on
31.03.2020 was 74.56%.