'FDI limit for defence manufacturing to be raised to 74 per cent'

FM Nirmala Sitharaman

In a big-bang reform measure, the Union government has decided to raise the limit for foreign direct investment (FDI) for defence manufacturing from 49 to 74 per cent under the automatic route. Speaking to the media, Finance Minister Nirmala Sitharaman on Saturday said that time-bound defence procurement process and faster decision-making will take place under the new policy.

The government will set up a project management unit to support contract management. Further, realistic setting of general staff qualitative requirements of weapons or platforms will be taken up. Under the new regime, the government will also overhaul the trial and testing procedures. In a bid to enhance self-reliance in defence production, the government will notify a list of weapons and platforms for a ban on import with year-wise timelines. Indigenisation of imported spares will also be taken up. Meanwhile, former Union Finance Minister P Chidambaram raised questions on the third tranche of announcement made on Friday. He asked for a clarification.

P. Chidambaram

"FM may please clarify whether the sums she announced [R500 crore and R13,343 crore] are subsumed in the Expenditure Budget numbers or additional sums of money," asked Chidambaram He raised questions on the "bee keeping project" and said that the Expenditure Budget 2020-21 has already provided for bee keeping under the National Horticulture Mission and allocated R2,400 crore. "Under Animal Disease Control Programme the fight against foot and mouth disease has been launched with a 5-year outlay of R13,343 crore and allocation of R1,300 crore in 2020-21," he added.

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