‘Being Self-Reliant, secures the Nation’

Any country of the world, if it wants to make itself safe both internally and externally cannot do so until it becomes self-reliant. Without it one can’t even imagine of insuring full-proof internal and external security of the country. If any country is not fully self-reliant then it should be least dependant on others for its security purposes.  And we have started efforts in these directions. And our Prime Minister has taken several important steps in this regard. As far as India is concerned, you are aware that few decades ago. India was known as an agrarian economy. But today, India is turning into a specialised service economy.  And everybody agrees with it. You will be happy to know that India has been emerging as an international hub not only in the services but also in the field of research and development.

Here it is noteworthy to quote one report of 2015 that mentions that on investment in Research and Development Outsourcing area some of the largest investments comes to India.  In 2014-2015, Research and Development Outsourcing’s investments came in USA and China approximately US $ 2.3 billion and US $ 1.7 billion respectively.  And moreover, especially in the area of Global Engineering Research and Design, Research and Development centres have opened all over the world and more than 30 per cent of these centres are opened in India. We can corroborate these with figures also.

From April to December 2015, approximately 120 Research and Development centres were opened, out of which 57 were opened in India, among that 19 are exclusively dedicated to projects under Make in India initiative. This clearly proves that India has emerged as an alternative investment destination for global companies in the last 2 years. Through Make in India, manufacturing and engineering, research and development has increased, the result is that our country emerged as a destination for investments for the world’s largest companies. In the defence sector, under the ‘Make in India,’ initiative, we are promoting indigenous defence production and our government intends to give a rapid thrust to this sector.

As you know, the recently included Light Combat Aircraft, Tejas of the Indian Air Force, is a totally indigenous production. And as far as our government is concerned, our entire focus is to being as least dependant on other countries  as possible.  After we formed the government, we started to work towards this. As far as defence equipment procurement is concerned decision making is comparatively faster than earlier. Their implementation is also faster than before. In order to fulfil our needs, our government is also taking the decision to procure Indian produce.  Foreign companies along with Indian companies wants to participate in defence production in India, therefore we increased FDI limit in defence sector from 26 per cent to 49 per cent. We incentivise to large companies, who manufacture in defence sector in India through Make in India programme.

Though previous governments have tried to encourage indigenous defence but, it was not enough, which ultimately led to corruption instead of competitiveness in this sector. Now-a-days one can hear and read such charges in media easily. Therefore, government has taken several major steps to increase competiveness as well as transparency in the defence sector.

Proportion of defence purchases from domestic producers have gone up: Ashok Kumar Gupta

The current government is encouraging the involvement of private sector in defence production. The policies of the present government have helped the defence industry in India to advance. In the last two years, a number of initiatives has been taken under the Make in India initiative. There is a demand for procuring $250 billion worth of defence equipment. Defence Procurement Policy, 2016 in which a new category – ‘indigenously designed, developed and manufactured product’ was introduced. Following this, out of the 118 contracts awarded in 2015, 73 have been signed by domestic vendors. The preferential policy of defence procurement has substantially contributed to the strengthening of indigenous industries. Route for foreign companies to enter into Indian markets is through domestic producers. The only case where an FDI of above 49 per cent is allowed is when there is acquisition of technology which will eventually benefit India.

Licensing regime also has been liberalized which enables the manufacturing of 50-60 per cent products in India… This has lead to a spurt in demand and exports have gone up by100 per cent in the last two years. Another important area is the level-playing field that has been created for the private sector.  The government has increased funding in joint-ventures and assurances of orders are given even before the start of a project. These I   believe also provide a big boost to the start-up culture.

The government is expected to come out with some policy changes where preference will be given to domestic producers. According to statics, proportions of purchases have been going up.

In 2014-15, procurement from domestic industries was 62 per cent. This saw a jump to 65 per cent in 2015-16 and in the data for the current year stands at 71 per cent.  I am expecting the domestic procurement to go up by 80-85 per cent; there will be a time lag for things to mature.

(Excerpts from speech delivered at National Conference on Defence Production-Self Reliance and Beyond)

{The author is Secretary (Defence Production), Ministry of Defence}

by Ashok Kumar Gupta

Here I would like to discuss about ‘Mangalyaan’. I cannot understand that if we are capable of making ‘Mangalyaan,’ at a fraction of cost then why we should remain dependent on other countries for defence equipment. Under Make in India projects, we would like to achieve a new height in defence production. Foreign companies want to come to India for defence production and manufacture. I had been to Israel and China where I met the Prime Minister of Israel and senior member of Politburo who is in-charge of entire homeland security in China and both of them said that many of their companies intend to invest in India and produce defence equipment. They want not only to invest for manufacturing defence equipments but also these companies are also willing to transfer technology, this shows how India’s dignity has increased worldwide. Prime Minister Modi has rightly said that “come invest in India, Make in India”. He also added that the government is ready to give incentives and benefits to the defence manufacturing companies that are coming to India. If needed then we will rethink about the policy.

As you know, India is one of the 10 emerging economies also and one of the fastest growing economies of the world.  We are also fortunate enough that although the global trends are not positive,  India’s position is very well. India has received around 51 billion dollars FDI in a year, which is higher than FDI in the China and the US of the particular year. Government has initiated planned ways in Indian economy to accelerate investment cycle and it is moving forward.  The government has started to introduce systematic and procedural changes to speed up the Indian economy. We are also trying to promote the ease of doing business in India.   Government is facing ‘some problems’ in introducing the Goods and Services Tax (GST) from April 1, 2017 but those issues will be ‘solved ‘eventually and hope the GST will roll out on time. Once introduced, tax collection will increase; there’ll be 1.5-2 per cent increase in GDP.

The roll out of GST will bring transparency in the taxation system and our government has also come out with some measures to curb black money and corruption. In our government’s first cabinet meeting, we created SIT to control black money. Government has launched war against the black money hoarders and benami assets holders. Recently, we have taken some step to curb the parallel economy of black money.

Here I would like add one more thing that Prime Minister has started various programmes to promote innovation and entrepreneurship. I would like to discuss about the Start Up India scheme.  You must agree that start up gives major contribution to make any country’s economy dynamic.  In January 16, the Prime Minister announced the start-up action plan and tax holiday, capital gains tax exemption like concessions are given, while we have also created a dedicated fund of 10,000 thousand crores of rupees.

The role of Start up India is to make the economy self reliant. Start ups have the potential to propel India into the top three economies of the world and the government will provide all the help to achieve this goal. Along with the special services, I am certain that Start up will lead to increased manufacturing. And our youth will get the most out of it.

New employment opportunities will be created. I think India is on the path of progress.  And if we just keep walking on this path, then there is n o doubt, that in the next 10-15 years our economy, which is among top 10 economics of the world, will come in top 3 economics of the world.  We will do it by having firm conviction of the people. We want to make India a strong India, a self-reliant India.

(Excerpts from speech delivered at National Conference on Defence Production-Self Reliance and Beyond)

 by Rajnath Singh