New Delhi, Apr 20 (KNN)  The small industries development bank of India (SIDBI) has earmarked Rs 500 crore to provide loans to MSMEs involved in manufacture of defence products.

“In order to ensure regular supply of funds to MSMEs involved in manufacturing of defence products, SIDBI has decided to earmark an amount of Rs. 500 crore for providing loans, and further, a fund of Rs. 50 crore for equity support out of “India Opportunities Fund” managed by its subsidiary, namely, SIDBI Venture Capital Ltd,” an official notification from the Ministry of Defence read.

It is in keeping with the Defence Production Policy 2011 which requires the setting-up of a fund to provide necessary resources for development of defence equipment.

The move is one among several other major changes in the Defence Procurement Procedure (DPP) approved by the Defence Acquisition Council (DAC), the apex decision making body of the Ministry of Defence (MoD) to encourage the Indian Defence Industry.

“The only way forward for the country is rapid indigenization of defence products, with both the public and the private sectors playing pivotal roles in this endeavour,” said Defence Minister AK Antony, chairing the Council meeting.

“The government will make all efforts to create genuine level playing field for Indian manufacturing industries vis-à-vis Global Players,” he added.

There were other amendments to DPP-2011 with the objective of infusing greater efficiency in the procurement process and strengthening the defence manufacturing base in the country.  They include:

• Prioritization of various categories for capital acquisitions under DPP, the order of preference being buy Indian, buy and make India, make Indian, buy and make with ToT and buy global;
• Approval of release of 15-year perspective document, outlining the “Technology Perspective and Capability Roadmap” that will provide useful guidance to the Indian Defence Industry for boosting its infrastructural capabilities and directing its R and D and technology investments.
• Doing away with nomination by Department of Defence Production and facilitates selection of MToT partners by Indian bidders. This measure is expected to have a positive impact on private sector participation in maintenance, repairs and overhaul work.
• Advance consultations for ‘make’ procedure.
• Simplification of buy and make (Indian) procedure
• Making a clear definition of indigenous content
• Ensuring faster progress in “Make” and “Buy and Make (Indian)” cases
• Finalisation of defence list items
• Licensing for dual use items
• Consultations on security guidelines for Indian Defence Industry.
• Resolution of tax related issues
• Efficiency and transparency in defence procurement
• Enhanced delegation of financial powers
• DAC to approve all deviations (KNN)