Defence watch: MoD's answers to questions in parliament on July 24th

Measures to promote indigisation of defence equipment, the Government has:

(a) Accorded preference to acquisition under “Buy (Indian)”, “Buy and Make (Indian)” and “Make” categories, over “Buy (Global)” and “Buy and Make (Global)” categories;

(b) Raised FDI limit in defence to 49 per cent through FIPB route, and beyond 49 with the approval of Cabinet Committee on Security, where it could bring in state-of-the-art technology;

(c) Removed restrictions on FII holdings in the defence JVs, and the need for single largest Indian shareholder to hold at least 51 per cent equity;

(d) Formulated “Outsourcing and Vendor Development Guidelines” for DPSUs/OFs to gradually outsource from private sector, including SMEs; (e) Removed anomalies in excise/custom duties, levying it uniformly on public and private sector.

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Industrial licenses for defence production. There are 60 applications for defence industrial licenses pending with the government. A total of 287 industrial licences have been issued till date, with 70 having been issued since June 2014.

The government has pruned down the list of items for which industrial licences are needed under the IDR Act, reducing entry barriers for private industry. The initial validity of a licence has been increased from three to seven years, extendable by another three years. Restrictions on annual production capacity have been removed.

Recognising the need to promote defence exports, a Defence Exports Strategy has been promulgated.

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Export of defence equipment.  Over the last one year, defence equipment has been exported to 22 countries, including Afghanistan (helicopters, trucks), Oman (Jaguar fighter spares), Russia (MiG and Sukhoi-30 spares and services, avionics), Malaysia (Sukhoi-30 and MiG avionics and spares), Nepal (helicopters, ammunition, bulletproof vests), Singapore (naval vessel), Germany (light mechanical parts, detonating fuzes) and USA (work packages/forgings, electronics).

The Ministry of External Affairs (MEA) has a negative list of countries for defence exports. The MEA’s views are taken before granting NOC for export.

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FDI inflows into defence. Foreign direct investment worth $1.31 million has flown into defence during the last three years and the current year. A total of 34 proposals involving foreign investment have been approved so far.

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Crashes of fighter aircraft. During the last three years and the current year up to July 20, a total of 20 fighter aircraft have crashed. These include three Sukhoi-30MKI, 12 MiGs and five Jaguars. Four of these aircraft crashed in 2012-13; six in 2013-14; seven in 2014-15; and three this year so far.

Two air force personnel and two civilians were killed in these accidents. The loss to the government is estimated at Rs 386 crore.

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Shortage of soldiers, sailors and airmen. The personnel shortfalls in the military is as follows:

(a)        Army:             9,642 officers and 23,909 other ranks

(b)       Navy:              1,779 officers and 11,653 sailors

(c)        Air Force:        Nil officers and 6,654 airmen

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Coastal security. The Indian Coast Guard (ICG) has a total strength of 11,474 personnel. Based on inputs from national and state intelligence agencies, the ICG conducted 120 operations from January 1, 2012 till now.

Based on a “vulnerability/gap analysis” along the coast, a Coastal Security Scheme (CSS) has been formulated to strengthen security. Under Phase-1 of the CSS, 73 coastal police stations, 97 checkposts, 58 outposts, and 30 barracks have been established. Under Phase-II, another 131 coastal police stations, 60 jetties and 10 marine operation centres have been sanctioned.

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One rank one pension. The policy to address pension disparities has been adopted by the Government in the budget 2014-15. It will be implemented once the Government approves the modalities.