New Delhi: The Narendra Modi government today abolished a separate guidelines for joint ventures entered into by India‘s Defence Public Sector Undertakings, four years after the previous UPA government introduced it in February 2012.
From now, the Defence PSUs too would follow the guidelines on JVs issued by the Department of Public Enterprises and Ministry of Finance from time to time.
Here is the text of the decision taking at today’s Central Cabinet meeting chaired by Modi:
Cabinet approves abolition of Separate Guidelines for establishing Joint Venture Companies by Defence PSUs
The abolition of the existing JV guidelines will provide a level playing field between DPSUs and the private sector. It will allow DPSUs to forge partnerships in an innovative manner enhancing self-reliance in defence and provide for enhanced accountability / autonomy of DPSUs in ensuring that the process of JV formation is effectively managed by them, so as to secure best outcomes in the interest of national security.
All nine DPSUs, namely, Mazagon Dock Limited, Goa Shipyard Limited, Garden Reach Shipbuilders & Engineers Limited, Hindustan Shipyard Limited, Bharat Electronics Limited, Hindustan Aeronautics Limited, Bharat Earth Movers Limited, Bharat Dynamics Limited and Mishra Dhatu Nigam Limited will be benefited through this decision.
The decision comes in the backdrop of the issues which emerged in the operationalisation of JV guidelines of DPSUs. The Department of Defence Production came to the conclusion that with the increasing participation of the private industry in defence sector and the transformation taking place in the defence acquisition eco system thereon, the requirement of having separate JV guidelines for DPSUs is no longer considered necessary.
Background: Defence Production Policy promulgated in January 2011 with the objective of achieving substantive self-reliance in defence production including design and development capability had recommended that all viable approaches including JVs to be undertaken to achieve the desired self-reliance in defence production.