With Army Chief Gen V K Singh highlighting shortage of equipment, the Defence Ministry on Monday appeared to be fast-tracking decision-making as it approved a plan for development of capabilities and effected a major change in offset policy by including transfer-of-technology.
The Defence Acquisition Council (DAC), headed by Defence Minister A K Antony, also cleared the 15-year Long Term Integrated Perspective Planning (LTIPP) which would project requirements of the armed forces to be met through indigenisation and robust involvement of private sector.
The two-hour meeting of the DAC was attended by Army Chief Gen V K Singh, IAF Chief N A K Browne and Naval Chief Nirmal Verma. Prior to this, Antony had an hour-long separate meeting with the Army Chief and other senior Army officials to review the requirements of the force.
These meetings came days after Gen Singh flagged the issue of shortages and deficiences faced by the army like lack of ammunition for tanks and obsolesence of air-defence systems.
The 12th Defence Plan, approved by the DAC, charts the roadmap for development of capabilites of the three forces in tune with their future operational requirements and the role which the country will play within the region and outside.
The DAC also approved revised Defence Offset Guidelines (DOG) where it recognised transfer of technology (ToT) for discharge of offset obligations, meeting a key demand of foreign companies.
"Revised policy recognises ToT as eligible for discharge of offset obligations. Investment in 'kind' in terms of ToT must cover all documentation, training and consultancy required for full ToT," officials said.
As per the changes, the Ministry has demanded that the ToT should be provided without license fee and there should be no restriction on domestic production, sale or export.
Under the offsets clause, foreign vendors are required to invest at least 30 per cent of their contract value in India in selected fields of civil aerospace, homeland security and training.
The objective of offsets is to develop indigenous defence industry and manufacturing sector. The Ministry had to do without an LTIPP for the last 15 years as its approval was delayed. The LTIPP and Five Year Defence Plan, which will come into effect from this year, have been formulated over two years involving the Defence Ministry, HQ Integrated Defence Services and three forces, Defence Ministry officials said.
"While LTIPP is a broad vision document, the 12th Defence Plan deals with specific requirements and modernisation plans of defence forces and also allocation of resources for modernisation and day to day functioning," Ministry officials said.
It also plans to put up the unclassified version of LTIPP on its website in the form of Technology Perspective Capability Roadmap to enable DRDO, Defence Public Sector Undertakings and private sector to plan their research and development roadmap.
In earlier policy, offset obligations had to be discharged during the period co-terminus with the main procurement contract. "The revised guidelines allow offset obligations to be discharged within a timeframe that can extend beyond the period of the main procurement contract by a maximum period of two years," the officials said. Under the new guidelines, the banked offset credit too has been increased from two to seven years.