M A I N   N E W S

Defence acquisitions to be fast-tracked
Government clears five-year plan, issues new guidelines on transfer of technology policy
Ashok Tuteja/TNS

After the 1990s’ Bofors’ acquisition, the Army hasn’t purchased any Howitzer gun

New Delhi, April 2
Amid a spate of controversies involving the defence establishment, the Defence Ministry today cleared the long-term integrated perspective plan (LTIPP) for 2012-2027 and the five-year defence plan (2012-2017) besides effecting a key change in the offset policy by including transfer of technology (ToT).

The Defence Acquisition Council (DAC) met here this afternoon under the chairmanship of Defence Minister A K Antony and considered the perspective plans of the defence forces against the backdrop of Army Chief Gen V K Singh’s recent letter to Prime Minister Manmohan Singh over the army’s lack of war preparedness.

The two-hour meeting of the DAC was attended by Gen Singh, IAF Chief N A K Browne and Naval Chief Nirmal Verma.

Earlier in the day, Antony had an hour-long separate meeting with the Army Chief and other senior Army officials to review the requirements of the force. While the LTIPP is a broad vision document, the 12th defence plan deals more in detail with the specific requirements and modernisation plans of the defence forces as also projections for the allocation of resources for the modernisation and day-to-day functioning.

The DAC also approved revised Defence Offset Guidelines (DOG) in which it recognised ToT as eligible for discharge of offset obligations, which was a major demand of foreign companies.

“Investment in kind in terms of ToT must cover all documentation, training and consultancy required for full TOT (civil infrastructure and equipment are excluded). The ToT should be provided without licence fee and there should be no restriction on domestic production, sale or export,’’ according to the new guidelines.

In the earlier policy, offset obligations were to be discharged during the period co-terminus with the main procurement contract. The revised guidelines allow offset obligations to be discharged within a time frame that could extend beyond the period of the main procurement contract by a maximum period of two years.

Earlier in the day, Antony reviewed various issues and proposals relating to the acquisition for the army on capital and revenue accounts. The meeting was attended by Gen Singh and other senior defence officials.

Antony, who has also come in for some criticism from the Opposition over the recent controversies concerning his ministry, favoured more financial powers to the three services if it could lead to speedier acquisition of equipment, platforms and systems for the armed forces.

Antony directed the Army to streamline its acquisition process in such a manner that accountability could be fixed in the event of any slippages.

He asked the officials of the Defence Ministry and the army to examine the possibility of compressing the time taken for technical evaluations and trials, officials said. 

what it means

• The Five Year Defence Plan that will come into effect from this year was formulated over two years involving the Defence Ministry, Integrated Defence Services and three forces
• Tech transfer should be provided without licence fee and there should be no restriction on domestic production, sale or export
• Offset obligations to be discharged within a time-frame that could extend beyond the main procurement contract by a period of two years
• Antony favoured more financial powers to the three Services