Defence procurement, one of the last remaining vestiges of the pre-liberalisation era, is all set for sweeping reforms with the defence ministry approving a new blacklisting policy with softer norms.
Defence procurement, one of the last remaining vestiges of the pre-liberalisation era, is all set for sweeping reforms with the defence ministry approving a new blacklisting policy with softer norms.
“The file has been cleared. It is now with the Attorney-General for legal vetting. It will be issued as soon as his office clears it,” a top defence official told agencies. The final call now rests with the Attorney-General.
Tough blacklisting norms, prescribing a blanket ban on the procurement of all products of a blacklisted company, had handicapped defence procurement severely impacting the government’s drive to modernise the armed forces.
For example, the howitzer — a critical weapons in the Himalayan highlands — has not been procured for the last 30 years, substantially lowering the artillery’s offensive capability.
The new policy is aimed at promoting transparency, rationalising standards and also ensuring that the armed forces are not crippled by a lack of key equipment.
The ministry’s approval comes months after it cleared norms for engaging agents in defence deals, enabling foreign defence firms to appoint “agents” to market their products to the armed forces, but with strict government oversight which includes opening up of a company’s books to scrutiny and not allowing any success bonus or penalty fees among other measures.
The new policy, which aims to act harshly against wrong-doers, will comprise a mixture of heavy fines, graded blacklisting and other penalties.
“The idea is to make violations prohibitively expensive so that there is no inducement to violate the conditions,” the source said.
A new blacklisting policy had been a prime focus for defence minister Manohar Parrikar, who has held numerous meetings with various stakeholders on the issue. Earlier, he had voiced his concerns over the indiscriminate blacklisting of companies supplying defence products over “small issues”. However, he had insisted that “serious crimes” should not go unpunished.
