Economy
Imports to be last resort, new defence policy to push Make in India

The defence ministry has recently cleared several big ticket proposals under the Make in India initiative and the new procedure will push it further

 

With Make in India the new mantra for defence manufacturing, the government has decided against importing equipment unless it is impossible to make it at home and this thrust on indigenisation will reflect in the new Defence Procurement Procedure (DPP), sources said.
 
According to thes highly placed sources, the modified DPP, a draft of which is ready and under discussion in the defence ministry, is expected to be finalised by the end of this month.
 
The document, along with provisions for encouraging domestic industry, will have its spirit summed up in a preamble that will stress on Make in India.
 
"The DPP will have a preamble, which will clearly state that every product should be designed, developed and made in India," a highly placed source told IANS, not wishing to be identified by name.
 
"Imports will be allowed only in case we cannot make it in India and as a last resort," the source said, quoting from the preamble.
 
The defence ministry has recently cleared several big ticket proposals under the Make in India initiative and the new procedure will push it further.
 
Among other provisions, the DPP is likely to initiate the process for a Technology Development Fund (TDF), with initial capital of Rs 100 crore, a defence ministry official said.
 
This fund will provide financial support to the public and private sector, including small and medium enterprises, and over 69 academic and scientific research and development institutions other than the Defence Research and Development Organisation. The fund will provide support for development of defence equipment and systems that enhance cutting-edge technology in the country.
 
There is a provision for promoting domestic manufacturing in the existing DPP under the 'Make Procedure' but officials said it was "not yielding results".
 
The government is now likely to provide 80 percent of the research funding for promoting domestic manufacturing in the defence sector.
 
Other changes being made in the procedure include formulating a way to address complaints, as even anonymous and unsigned complaints often delay the procurement procedure. There is also a proposal to redefine the procedure for blacklisting a company.
 
"Nuanced changes in the offset policy are also on cards, as the ministry felt the current offset policy is not effective," the official said.
 
"In most cases we are being forced to deviate or give concessions to the foreign companies because our policy is not right," the official added.
 
He said under the modified DPP, the offset policy will be linked to Make in India.
 
The modified procedure has a provision for asking foreign suppliers to forge links with Indian companies and manufacture spare parts in India.
 
"We have had discussions with the Russians, Americans, Britons and French on this (offsets) and we have got a positive response," the official said.
 
The Defence Procurement Procedure (DPP) was first drafted in 1992 and reviewed in 2002. It was then revised in 2003, 2005, 2006, 2008, 2011 and 2013.
 
A 10-member panel was constituted by Defence Minister Manohar Parrikar to modify the DPP document which gave its draft report last month.
 

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Pankaja Munde ups purchase order by three times in six days
Pankaja Munde, Maharashtra Minister for Women and Child Welfare increased the order for child growth monitoring machines to Rs18 crore from Rs6 crore in just six days 
 
Under the Integrated Child Development Services (ICDS), successive governments in Maharashtra have allegedly misappropriated funds, partly allocated by the Centre, to unscrupulously buy child growth monitoring machines, by flouting procurement norms.
 
Pankaja Munde, Minister for Women and Child Welfare, Maharashtra placed two separate orders for procurement of these growth-monitoring machines – once on 4 February 2015 for Rs6 crore and then suddenly increasing the order within 6 days – on 10 February 2015 to Rs18 crore. Two contractors, Sai Hi-Tech Products and Nitiraj Engineers Pvt Ltd, were awarded the contract (share of 50% each). Strangely, and scandalously, Nitiraj Engineers was literally gifted the contract, without the company even asking for it. 
 
What’s more, Sai Hi-Tech’s factory in Pune is untraceable and both Sai Hi-Tech as well as Nitiraj Engineers have given their postal address as State of Manipur, although the other details of the address pertain to Pune and Dhule! What is interesting is the same Nitiraj Engineers was awarded similar contract in 2011, which specially mentions "transportation cost of the above (2,300) machines from Himachal Pradesh to Anganwadi at a rate of Rs200 per machine or Rs4.60 lakh". So where exactly is Nitiraj Engineers located? Is it in Dhule in Maharashtra, Dhule in Manipur or Himachal Pradesh?
 
On 4 February 2015, the Commissioner of Women and Child Welfare wrote to the Principal Secretary, stating that, “the WHO’s international Child Growth Standards are being implemented in the financial year 2014-2015 by supplying machines in 20 districts at 188 rural centres, 63 Adivasi centres and 66 urban slum centres. Thus, 7,852 machines would be required and each machine would cost Rs8,820. The procurement should be made from M/S Sai Hi-Tech Products, 365, Manjari Budruk, District Pune. The overall cost is Rs6,92,63,460.” 
 
Interestingly, in this communication, only Sai Hi-Tech’s letter dated 6 November 2014 was mentioned. (Anne 48) There was no communication from Nitiraj industries, as per any available record, seeking any order from the government for supply of these machines. Even then, Pankaja Munde, the Minister, strangely and audaciously, awarded the contract to Sai Hi-Tech and Nitiraj Industries in equal proportion in another letter dated 13 February 2015.( Anne 48A)
 
But, the malpractice does not end here. Suddenly, and strangely, on 10 February 2015, the Commissioner of Women and Child Welfare appears to have realised that the department needs an additional 20,729 machines of the same specification. What prompted the Commissioner to again order for such a huge number of machines is not known. But something concocted between 4th and 10th February. Interestingly, in this letter also there is no reference to any communication from Nitiraj Engineers (Anne49) .Even then the Minister issued one more order on 13 February 2015 of a whopping Rs18.37 crore contract, which was again equally distributed between Sai Hi-Tech and Nitiraj Engineers. (Anne -49A)
 
Pankaja Munde, the daughter of Bharatiya Janata Party (BJP)’s deceased leader Gopinath Munde, has been in the eye of the storm for the Rs206 crore-chikki-scam. While giving Pankaja a clean chit, Maharashtra Chief Minister Devendra Fadnavis announced setting up of the three-member Committee headed by the present chief secretary to investigate the chikki-scam.
 
Moneylife’s articles on this issue, Chikki moment: When the SCIC also keeps mum on RTI queries, Why Pankaja Munde cannot get away by saying sorry and After Chikki, now a biscuit scam! which went viral is but a tip of the iceberg of the scam. RTI activists have made documents of the biscuit scam public even as the CM and CIC are mum on the issue of putting them up in the public domain – mandatory under Section 4 of the RTI Act. As per the documents procured - on 12 February 2015, Munde ordered purchases of Ayurvedic biscuits worth Rs95.51 lakh. However, the very next day, that is on 13th February, the order was increased to Rs5 crore without any changes in the number of beneficiaries.
 
We hope the Chief Secretary looks into the latest crucial documents on the purchase of child growth monitoring machines by flouting procurement norms, to understand why there is no question of giving Munde a clear chit and the criminality involved at the expense of health and nutrition of infants, children and pregnant mothers. In addition, the malpractice of procuring material does not end with just chikki, Ayurvedic biscuits or child growth monitoring machines. There is more, like handmade paper, steel plates, sprinkles, protein powder, books, and plastic mats. Hope the three-member Committee headed by the Chief Secretary also looks in to all these aspects as well.
 
 
 

WHO Child Growth Standards

 

The new WHO Child Growth Standards confirm that children born anywhere in the world and given the optimum start in life have the potential to develop to within the same range of height and weight. Naturally, there are individual differences among children, but across large populations, regionally and globally, the average growth is remarkably similar. For example, children from India, Norway and Brazil all show similar growth patterns when provided healthy growth conditions in early life. The new standards prove that differences in children's growth to age five are more influenced by nutrition, feeding practices, environment, and healthcare than genetics or ethnicity.

 
 
Annexure 48
 
 
Annexure 48A
 
 
Annexure 49
 
 
Annexure 49A
 
 
Annexure 51
 
 
(Vinita Deshmukh and Vijay Kumbhar, both are RTI activists from Pune. Ms Deshmukh is also consulting editor of Moneylife, and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.

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COMMENTS

Victor

2 years ago

Both the companies are under DGS&D rate contract. So the prices mentioned are approved by the Director general of Govt. of India.
There can not be any dispute on that. Regarding the increase in number, it depends upon the funds available.
It is as per the requirement of the welfare department and availability of funds. Where is the AUDACITY involved in it? And why any of the supplier firms should write a letter to the government to increase the order? It is just a sham RTI enquiry.
Also, it is a regular practice of the companies to have a registered office in the states in which there are tax benefits. These companies may be located anywhere in India and they may show a registred office in Imphal, Aizawl or anyhere in India for that matter. To get a DGS&D rate contract is not an easy process, the RTI activists should know this. If they have to probe, they should challenge the DGS&D process.

TIHARwale

2 years ago

Otherwise Pankaja neice of Pramod Mahajan would be without Juta [Shoes] , like her forefathers. There is Marwari proverb " Jab maiy Marwad se niklo tou pauv mey nahi tha juta [ when I left Marwad i did not have shoes on my feet]" applies to Mahajan/Munde family.

TIHARwale

2 years ago

Pankaja Munde is neice of Pramod Mahajan so nothing surprising considering her lineage

Nifty, Sensex may be headed lower: Weekly closing report
A fall below 8,400 would lead to a decline 
 
We had mentioned in last week’s closing report that Nifty, Sensex were headed higher and that Nifty has to close above 8,460 for the uptrend to continue. The 50-scrip Nifty had closed the previous week at 8,532.85. For Friday, the losses have been marginal and for the week, as a whole, the market has ended flat. The indices are moving sideways, while the market struggles to gain the momentum for a rally.
 
 
On Monday, the Nifty moved in the green for almost the entire session and dipped in the end, recording marginal gains. Last week's announcement of Rs70,000 crore infusion into public sector banks (PSBs) in the next four years continued to boost banking stocks. According to analysts, domestic markets remained positive on the back of a surge in banking and auto stocks ahead of the RBI's (Reserve Bank of India) monetary policy review on Tuesday. The markets’ rise was arrested by the higher levels of profit booking which trimmed some of the early gains due to weak Greece and Chinese stock markets, cited analysts.
 
On Tuesday, the RBI, in its third monetary policy review, kept the repurchase rate, or its short-term lending rate, unchanged at 7.25%. Accordingly, the reverse repo rate, or the short-term borrowing rate, was unchanged at 6.25%. The cash reserve ratio (CRR), or the liquid money banks have to compulsorily hold, stood unchanged at 4%. The decision to maintain the status-quo disappointed investors, as a general consensus had appeared that showed that the current review might be the last chance that RBI had to cut rates in this calendar year. Markets are doubtful over the RBI's ability for a future easing of the monetary policy in the hindsight that inflation might spiral up again and the US Fed's decision on its own rates is coming up in September.
 
On Tuesday, the 50-stock index opened marginally higher but made a quick move into the negative. It stayed in the red for almost the entire session. The Nifty broke the 8,500 support but recovered and closed marginally in the red.
 
For the entire session Wednesday, the 50-stock benchmark remained above the previous day’s close albeit moving in a narrow range. According to analysts, bargain hunting was observed in the market after Tuesday's fall. RBI's announcements of changing the cap on bond investment limit from being dollar-linked to rupee-denominated, segregation of the bond market and its engagements with the government over the new financial code also boosted the markets, they said. Sector wise, healthy buying was observed in healthcare, automobile, information technology (IT), fast moving consumer goods (FMCG) and capital goods sectors. However, the banking, consumer durables and metal sectors came under selling pressure.
 
On Thursday, the major indices in the Indian stock markets were range-bound and made marginal gains during the day’s trading. According to analysts, Indian markets opened positively tracking the SGX Nifty and Wednesday's data which showed healthy growth in services PMI (purchasing managers' index). Sentiment was also helped by upbeat economic data from China. Markets gained due to the positive response to the RBI governor's comments on the economy. Positive sentiments surrounding Cognizant’s quarterly results supported the rally across information technology stocks.
 
On Friday, the market failed to gain momentum for a rally, and the indices closed marginally in the red. A logjam in parliament, impending US rate hike decision and other negative global cues led to the close in the red. Sector-wise, healthy buying was observed in oil and gas, automobile and consumer durables stocks. However, banking, capital goods and healthcare sectors came under selling pressure. 
 
Out of the 27 main sectors tracked by Moneylife, top five and the bottom five sectors for this week were:
 

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