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Defence PSUs asked to exploit new offset policy

Written by: Staff

New Delhi, July 7: Defence Minister Pranab Mukherjee today asked Defence Public Sector Undertakings (DPSUs) to gear up to take full advantage of the new offset policy that would open up new vistas for growth in the country in terms of industry participation, technology upgradation, employment and exports.

The new offset policy makes it mandatory for foreign companies to invest 30 per cent of the amount in India for any procurement valued at Rs 300 crore or more.

According to an estimate, as much as 10 billion dollars would flow into the country for investment through offsets.

Mr Mukherjee, who has been reviewing the performance and preparedness of various DPSUs, asked their top managements to expand their vendor base and increase cooperation with small and medium enterprises to give a boost to employment generation.

The Defence Minister today reviewed the performance of Bharat Dynamics Ltd (BDL) and Garden Reach Shipbuilders and Engineers Ltd (GRSE). Last week, he had reviewed the performance of Bharat Electronics Ltd and Mazagon Docks Ltd (MDL).

Emphasising the need to forge a healthy linkage between the public and private sectors, the Defence Minister asked the DPSUs to maintain strict compliance of targets, both financial and physical.

For complete synergy, he directed that there should be joint monitoring of major projects by the representatives of DPSUs, Ministry of Defence, Sevice Headquarters and the DRDO.

Representatives of the Bangalore-headquartered BEL, having a Rs 3500-crore turnover, informed that the company was interacting with international suppliers, including American companies like Boeing IDS, Raytheon, Hamilton Sundstrand, Lockheed Martin and French company EADS. BEL achieved export sales worth 13.70 million dollars during 2005-06, and has set an export target of 24.80 million dollars for the current year. The company has set up two Central Research Laboratories at Bangalore and Ghaziabad (near Delhi) for undertaking research in futuristic areas to identify and realise latest technologies relevant to the company products.

''The objective is to make BEL a fountainhead of electronics technology, thus improving its leadership position with the country's electronics industry and making it of international standards,'' they told the minister.

However, BEL's experience regarding participation of private industry to develop complementary strengths has not been entirely happy as new suppliers are targeting the areas which are the core areas of BEL, such as radars, communication, and electro optics.

BEL officials also sought funding support from the Defence Ministry for strategic technologies such as infra-red detectors and micro and nano technology.

The Mazagon Dock Ltd (MDL), a Defence Public Sector shipyard, is engaged in the construction of submarines and large ships like Stealth Frigtes and Destroyers for the Indian Navy.

MDL is all set to commence construction of Scorpene class submarines with French collaboration by the year-end. The company recently bagged an order worth Rs. 231 crore for construction of suction dredger from the Dredging Corporation of India against international competition.


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