Cabinet opens gates for private players in defence

The ‘strategic partnership’ policy in the defence sector received a nod from the Cabinet on Wednesday, opening the gates for Indian private sector players to start manufacturing high-end defence equipment and weapons in partnership with foreign original equipment manufacturers (OEMs).

“Defence preparedness necessitates that you source domestically and manufacture domestically,” Finance Minister Arun Jaitley said while announcing the decision.

The decision has made way for private players to enter four key segments — fighter aircraft, helicopters, submarines and armoured vehicles such as tanks.

Currently, five public sector units are manufacturing defence equipment in the country, besides the Defence Research and Development Organisation, Ordnance Factory Board (which has over 40 factories) and others. Despite these, however, India remains the world’s biggest importer of weapons, accounting for over 13 per cent of total sales worldwide.

Jaitley added that domestically manufactured equipment would get preference for government procurement.

The Cabinet also decided on a 10.6 per cent increase in the fair and remunerative price (FRP) for sugar at ₹255 per quintal. Additionally, it also approved an All India Institute of Medical Sciences (AIIMS) in Kamrup, Assam, at an expenditure of ₹1,123 crore.

Another proposal — to develop a Noida-Greater Noida metro rail corridor — was also cleared by the Cabinet. The corridor, which is aimed to cover 29.707 km and will be fully elevated, is expected to cost ₹5,503 crore, Jaitley announced.

In another decision, the government has approved a proposal to allocate 2.5 per cent of the Central Road Fund for the development and maintenance of national waterways.

The move is estimated to result in over ₹2,000 crore being allocated for the development of waterways. The idea is to ensure diversion of cargo from roads to inland waterways. The activities in which funds will be used include jetties, equipment and dredging.

A statement also said that the Cabinet Committee on Economic Affairs has given ‘in principle’ approval to transfer the property of Hotel Janpath, New Delhi, to the Ministry of Urban Development.