On the road to indigenous defence production

The Department of Industrial Policy and Promotion has recently cleared 19 proposals for defence production in which some of the leading corporate giants are involved


Thanks to the liberalised delicensing procedure as outlined in the Foreign Direct Investment Policy,  which raised the FDI cap from 26 to 49%, fourteen pending applicants for defence related projects were adviced that licenses were not required for them anymore, while 19 were cleared by the DIPP.

This notification also permits portfolio investment upto 24% of the total equity of the investee  and joint venture company under the automatic route.  Such a move makes FDI entry easier.

The Department of Industrial Policy and Promotion has recently cleared 19 proposals for defence production in which some leading corporate giants are involved.  Companies reported to have obtained clearance are, Reliance Aerospace Technologies, Bharat Forge, Mahindra Telephonic Integrated Systems, Punj Lloyd and Tata Advanced Materials Ltd.

Press reports indicate that Airbus of France may partner the Tatas to build military transport planes.  In the past, the Indian Air Force has solely depended on Avros for transport Aircraft, but these ageing planes now need to be upgraded or replaced. It is likely that this Airbus-Tata joint venture may make serious bids and secure the contract to build these planes in the country.

It has also been reported in the press that the Defence Acquisition Council recently met and has cleared various projects estimated to be valued at Rs 80,000 crores.

These include six submarines, to be built in Indian shipyards with foreign collaboration, valued at Rs 50,000 crores over ten years.  Besides this project, other proposals include, "Spike", an anti-tank missile of Israeli origin, which has been under trial and evaluation in the Army. Spike has been chosen over the "Javelin" from the US and the initial deal is said to cover 321 launchers and 8356 missiles; but the technology for making Spikes will be transferred to facilitate indigenous manufacture in India. This project is estimated to be worth Rs 20,000 crores.

Other defence deals include two midget submarines, 12 Dornier maritime patrol aircrafts for the Navy, 363 BMP-II infantry combat vehicles for the army, valued at Rs 1800 crores, Russian Uran missiles worth Rs 1436 crores, 1768 new railway wagons for transporting tanks, missiles and ammunition valued at Rs 740 crores, and Rs 662 crores allocated for 1761 radio relay containers mounted on vehicles.

Both Mazagon Docks and Larsen & Troubro Shipyards are already associated with some of the defence contracts, and their past performance should enable them to get some opporutnitites in the new defence deals. Railway wagon manufacturers are also likely to benefit as a result. The most important issue to keep in mind is that timelines need to adhered to and quality control needs to be impeccable.


Why Moneylife Foundation’s Free Credit Helpline Is Important for You

Correct non-partisan guidance that helps people handle a credit default or wrong credit report offers a humane and win-win solution for lenders and borrowers


Moneylife Foundation launched a new Credit Helpline on 17th October to provide free, confidential counselling about loans to borrowers in distress situation. These are people who are finding it difficult to repay loans due to certain exigencies; they have been wrongly marked as defaulters because of a mix-up in credit records or find that a forgotten credit card or mobile bill, now hugely inflated, has come back to haunt them through a recovery agency. Given the poor financial literacy in India, people facing such situations usually panic and rush to ‘debt doctors’ who promise to fix the problem or ‘settle’ the issue and give them a clean credit record. Often, these are fake promises or an attempt to take advantage of the borrower’s ignorance.


Here is an opportunity to get correct, non-partisan guidance on a confidential basis without paying anything. However, the Helpline is emphatic that it will not help people to avoid payment. The idea is to explore options and mutually acceptable solutions between the lender and the borrower, to find an amicable resolution which leads to the least possible damage to a person’s credit record. The advice will be provided by senior retired bankers and central bankers. The Foundation has created an advisory committee of experts who will guide the counselling effort.


The Helpline will also provide guidance for rebuilding one’s credit record or improving credit scores. It is based on the understanding that a payment default is sometimes beyond a person’s control—it can be the result of a pink slip, problems with the employer (non-payment of salary or closure of company), serious illness or a personal calamity or career change.


Dr Kirit Somaiya, Member of Parliament, launched Moneylife Foundation’s Credit Helpline (, in the presence of Dr Deepali Pant Joshi, executive director, Reserve Bank of India, Mohan Jayaraman, managing director, Experian India, Ranjan Dhawan, executive director, Bank of Baroda and D Venkatesh, director of Softcell Technologies.


Speaking at the event, Dr Somaiya, a chartered accountant and Ph D in finance & capital markets from Mumbai University, highlighted an interesting aspect of the issue. He said, “We cannot encourage defaults. However, at the same time, we need to make sure that small borrowers are not punished, while big borrowers like Kingfisher are being given settlement options.”


Mr Somaiya said, “Let’s develop this concept of handholding borrowers in distress at the national level. I will take the initiative with the finance ministry, the Reserve Bank of India (RBI) and the Parliament. We will see that such a Helpline becomes an instrument for cleaning up the concept of credit and to stop extortion. We all know what is happening today. At some places, these credit recovery agencies are indulging in extortion. Let us all try and stop the extortion of borrowers who may have defaulted by the recovery agents and debt doctors.” He also alluded to the use of dubious recovery agencies with underworld links (‘bhai log’) to frighten people into paying.



Citing an example of mistaken identity, Mr Somaiya said, “Former Union minister Suresh Prabhu received bills from a mobile company, despite disconnecting the number for more than two years. Since the number was disconnected, he thought he was not liable to pay the bills. The amount grew to about Rs22,000. This was reported to a credit agency and Mr Prabhu got a negative credit rating and was denied a credit. If this can happen to Suresh Prabhu, I am trying to imagine what can happen to a common customer or investor.”


Mr Jayaraman of Experian underlined the importance of ‘just-in-time’ assistance provided by helplines such as these, which, in fact, encourage financial literacy at the time when the person is most receptive. He also made the big announcement that Experience CIC would provide free credit reports to the first 250 people who applied for it through Moneylife Foundation’s Credit Helpline.


Dr Pant Joshi, executive director RBI, highlighted numerous ways in which bankers were ignoring consumers or openly indulging in mis-selling. She explained at length how RBI is attempting to get a fairer deal for customers by enunciating their rights framed in the RBI’s newly issued consumer charter.


She further said, “There has to be a synergy between financial inclusion, financial literacy and customer protection for sustainable financial stability. The macro-economic framework and financial sector development necessitate financial deepening and a robust framework of Customer Protection for stability.”


Ranjan Dhawan, executive director Bank of Baroda, explained the Bank’s support to the Credit Helpline by illustrating the high financial illiteracy that he has personally encountered even among businessmen and highly educated persons. He said, it was one of the main reasons why so many persons fall prey to mis-selling.


D Venkatesh, director Softcell Technologies, said that technology played an important role in expanding the reach of the Helpline. “We will always be there to support Moneylife in this,” he added.


Moneylife Foundation’s Credit Helpline as well as a panel of counsellors and other resources in this initiative are free and can be availed by anyone.



Moneylife Foundation expects the Credit Helpline to go a long way in creating an informed customer base for banks and finance companies and help solve the vexing problem of bad loans.


In fact, it is beneficial to banks as well. If a defaulter can be made to understand that he cannot renege on his obligations without consequences to himself, he will make an effort to pay at least some of the money, rather than run away. This allows banks to improve recoveries in personal credit far more than through threats and recovery agents.



To access Moneylife Foundation’s Credit Helpline, one needs fill up the form available at If the person is a Moneylife Foundation member, her details get pre-filled in by algorithm, for convenience. However, the person needs to be logged in to to see her pre-filled details (and edit them, if needed).


• Consumers should email/ call and Moneylife Foundation personnel to set up a confidential meeting with counsellors, if required.

• Counselling will be done by ex-central bankers, commercial bankers and credit bureau experts.

• The details of each case reaching out to the Credit Helpline will be opened with a standard documentation and closed with a feedback form.


CSR Reporting, Legal and Fiscal Due Diligence by NGOs

Noshir Dadrawala provided an enlightening account of what NGOs can expect by way of CSR funds as well as the eligibility criteria and reporting requirements that are mandated by law


Noshir Dadrawala, CEO of Centre for Philanthropy, addressed Moneylife Foundation on the legal provisions regarding CSR funding. However, he told NGOs to be pragmatic. He went on to explain in detail the provisions of the Companies Act, 2013, and the numerous clarifications notified which had not only expanded the scope of the funding, but also allowed the provisions of the Act to be interpreted in the broadest possible manner.


He said that CSR funds will not be available in the form of donations. NGOs can only seek funds for specific projects and their utilisation would need to be certified by an auditor.


Mr Dadrawala also explained the sort of expenses that could be included under project expenses and those which would be classified as administrative costs and disallowed.

Mr Dadrawala expects CSR rules to keep evolving and said that the first year of their implementation was the best time for companies to experiment with the rules and their interpretation.


Mr Dadrawala was addressing a packed audience at Moneylife Foundation on the provisions of CSR under the Companies Act, 2013, and legal compliances required. The audience comprised largely NGOs and their representatives. He took questions from a very engaged audience all through the session and was more than forthcoming in his replies. The pros and cons of registering an NGO or not-for-profit entity as a trust, society or a Section 8 entity (earlier Section 25) were also discussed.


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