Govt for PPP in defence production : Pranab

Kolkata, Jun 18 (UNI) After a lukewarm response from big private players, the Government is trying to forge public-private partnership(PPP), largely with small and medium enterprises, in all production of equipment, Defence Minister Pranab Mukherjee today said.

Addressing the inaugural session of the annual general meeting of Merchants Chamber of Commerce, Mr Mukherjee said the ordnance factories had been asked to outsource equipment from domestic small and medium enterprises instead of overburdening their capacity.

''We are trying for PPP in defence production and encouraging outsourcing from SMEs. The ordnance factories had been asked to receive orders according to their capacities and outsource the rest from these private companies,'' he said.

Mr Mukherjee said PPP in defence production could also play an important role in the modernisation of the ordance factories.

Informing that at present 30 per cent of the Rs 26,000 crore capital budget of defence was used for importing equipment, Mr Mukherjee said the Government was in favour of imports if technology was available.

The Defence Minister said according to the recommendation of the Kelkar committee, the Government put thrust on indigenisation in the production of defence equipment and issued necessary directives to the 39 ordnance factories, eight public sector defence enterprises and 50 DRDO laboratories in this regard.

The step became necessary following lack of interest from private companies after the Government threw open the doors of defence production to them in 2001 with an FDI cap of 26 per cent, he said.

''Except the Tatas and L and T, no other company showed interest, prompting us to appoint the Kelkar Committee to suggest what to do.

Out of the total 40 suggestions of the committee, we have implemented 28 and the rest are in the process of implementation,'' he said.

UNI KDG/BA RD RR KN1926