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Defense offsets policy to bring $10B in 11th plan
Friday, 07 July 2006, 19:30 IST
NEW DELHI: India's new offsets policy for defense procurements is likely to bring in $10 billion during the 11th Five Year Plan (2007-11), opening up new growth avenues in terms of technology upgrades, industry participation, exports and employment generation, figures released Friday show.
"Capital expenditure on defense during the plan period will be 
300 billion per year and 1.5 trillion for the entire period. Thirty percent of this - 500 billion will flow back by way of offsets," a defense ministry spokesman said.
The government's new offsets policy that came into effect earlier this year, makes it mandatory for foreign companies to invest 30 percent of the amount in India.
The figures acquire significance as Defense Minister Pranab Mukherjee is currently undertaking a review of all defense public sector undertakings (DPSUs) and has urged them to immediately get their act together to take advantage of the inflows.
"The first priority for the offsets investments will be in defense-related industries, followed by other sectors," the spokesman pointed out.
Mukherjee has thus far reviewed the performance and preparedness of four DPSUs - Bharat Electronics Ltd (BEL), Mazagon Docks Ltd (MDL), Bharat Dynamics Ltd (BDL), and Garden Reach Shipbuilders and Engineers Ltd (GRSE).
In his interactions with the top managements of the four firms, he asked them to expand their vendor base and to increase cooperation with small and medium private sector enterprises to boost employment generation.
"The minister was of the view that there should be healthy linkages between the public and private sectors," the spokesman said.
Urging the units to strictly comply with financial and physical targets, Mukherjee called for a joint monitoring of major projects by DPSUs, the defense ministry, service headquarters and the Defence Research and Development Organization (DRDO).
Source: IANS
300 billion per year and 1.5 trillion for the entire period. Thirty percent of this - 500 billion will flow back by way of offsets," a defense ministry spokesman said.
The government's new offsets policy that came into effect earlier this year, makes it mandatory for foreign companies to invest 30 percent of the amount in India.
The figures acquire significance as Defense Minister Pranab Mukherjee is currently undertaking a review of all defense public sector undertakings (DPSUs) and has urged them to immediately get their act together to take advantage of the inflows.
"The first priority for the offsets investments will be in defense-related industries, followed by other sectors," the spokesman pointed out.
Mukherjee has thus far reviewed the performance and preparedness of four DPSUs - Bharat Electronics Ltd (BEL), Mazagon Docks Ltd (MDL), Bharat Dynamics Ltd (BDL), and Garden Reach Shipbuilders and Engineers Ltd (GRSE).
In his interactions with the top managements of the four firms, he asked them to expand their vendor base and to increase cooperation with small and medium private sector enterprises to boost employment generation.
"The minister was of the view that there should be healthy linkages between the public and private sectors," the spokesman said.
Urging the units to strictly comply with financial and physical targets, Mukherjee called for a joint monitoring of major projects by DPSUs, the defense ministry, service headquarters and the Defence Research and Development Organization (DRDO).
Source: IANS