While presenting the fourth tranche of measures undertaken in the economic stimulus announced by PM Modi, Union Finance Minister Nirmala Sitharaman said that the FDI limit in defence manufacturing under automatic route will be raised from 49% to 74%.
While listing a slew of measures to make the defence sector more self-reliant, Sitharaman said that it will lead to better partnership of the Make in India and Atmanirbhar Bharat campaigns.
She said that after consultation with the Department of Military Affairs, a list of weapons will be notified, which will be banned from importing. "These weapons/platforms will be made in India and purchased from India," the finance minster said.
In addition, indigenisation of spare parts will be promoted, which will give an impetus to Indian producers of defence equipment as well as help in reducing the Defence sector's import bill, she said.
FM Sitharaman also announced that Ordnance Factories will be corporatised, clarifying that corporatisation is not the same as privatisation.
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She said that corporatisation of Ordnance Factories is being done so that they can be better managed, and eventually get listed on the stock exchange.
"Ordinary Indian citizens can buy shares in them and through that, we expect that the Ordnance Factory Boards and their processes, decision-making, output, performance, will become transparent for citizens," Sitharaman said.
The finance minister laid out a slew of measures for time-bound procurement of defence equipment and faster decision making, including the setting up of a Project Management Unit.
This included, realistic setting of General Staff Qualitative Requirements (GSQR) of weapons/platforms and overhauling trial and testing procedures.
"Unrealistic qualitative requirements prolong the process of procurement by limiting suppliers and other compliance issues. Hence, these steps are being taken."
FM Nirmala Sitharaman presented structural reforms for right sectors today – coal, minerals, defence production, airspace, airports, MRO, DISCOMS, Space, and atomic energy.She said that these reforms are "not isolationist", but help in decongesting the sectors, which needed policy simplification, so that necessary boost for growth and employment can be provided.