New Delhi. 06 May, 2016. Modernisation of Army is a continuous process based on threat perception, operational challenges and technological changes to keep it in a state of readiness to meet the entire spectrum of security challenges.
The equipment requirements of the Army are reflected in the planning process which includes 15 year Long Term Integrated Perspective Plan (LTIPP), five year Service-wise Capability Acquisition Plan and two year roll-on Annual Acquisition Plan. Capital Procurement of Defence equipment is carried out as per Defence Procurement Procedure (DPP). Ageing of equipment is a natural process and is dealt with through proper maintenance, obsolescence management, upgrades and acquisition of new equipment.
During the 11th Plan period, 180 numbers of contracts have been signed with cumulative value of Rs.63,172.80 crore and in the 12th Plan period (2012-13 to 2015-16), 95 numbers of contracts have been signed with cumulative value of Rs.40685.45 crore for Capital Acquisitions of Army. The equipment contracted include helicopters, Tanks, Missiles, Rockets, UAVs, Radars, Simulators and vehicles.
A number of measures have already been taken to achieve Self Sufficiency in defence production by harnessing the capabilities of the public and private sector. These measures include according priority and preference to procurement from Indian vendors, liberalization of the licensing regime and providing access to modern and state-of-the-art technology to Indian industry by raising the cap on FDI in the defence sector.
The new Defence Procurement Procedure 2016 (DPP 2016) has been promulgated for Capital procurements and has come into effect from 1st April 2016. DPP 2016 gives strong support to “Make in India” by according the highest priority to Buy Indian (Designed, Developed and Manufactured) (IDDM). It also focuses on enhancement and rationalization of indigenous content and includes provisions for involving private industry as production agencies and technology transfer partners.
The ‘Make’ Procedure has been simplified with provisions for earmarking projects not exceeding development cost of Rs.10 crores (government funded) and Rs. 3 crores (industry funded) for MSMEs.
The expenditure in respect of orders placed on foreign vendors for capital acquisitions during each of the last three years is on a decline. In the financial year 2013-14 it was Rs. 35082.10 Crores, in 2014-15 Rs. 24992.36 Crores and in 2015-16 Rs. 22422.12 crores.