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Defence services to review acquisition plans, budget needs for next 10 years

This was the last meeting of the DAC before the presentation of the Union Budget on February 29. In Budget 2015-16, Rs 93,657 crore had been budgeted for capital expenditure out of an overall defence budget of Rs 2.46 lakh crore.

Written by Sushant Singh | New Delhi |
February 24, 2016 1:53:36 am

In a meeting of the Defence Acquisition Council (DAC) on Tuesday, defence minister Manohar Parrikar undertook a review of defence acquisitions since June 2014, when Narendra Modi-led NDA government came to power. In the meeting, Parrikar asked the defence services to review their capital acquisition proposals and budgetary requirement for the next 10 years.

This was the last meeting of the DAC before the presentation of the Union Budget on February 29. In Budget 2015-16, Rs 93,657 crore had been budgeted for capital expenditure out of an overall defence budget of Rs 2.46 lakh crore.

Besides asking for a review of the capital acquisition proposals for the next 10 years, Parrikar also asked the defence services to project their requirements as per relevance.

The DAC also approved the issue of Letter of Intent for Mine Countermeasure Vessels for the navy to Goa Shipyard Ltd and placed a follow-up order for 109 6X6 Heavy Mobility Vehicles for the army for Rs 457 crore.

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The review brought out that 81 capital acquisition projects have matured since June 2014, while proposals worth Rs 1.5 lakh crore have been cleared by the defence ministry during this period.

Acceptance of Necessity (AON) for 66 projects, amounting to more than Rs 2 lakh crore, has also been issued by the defence ministry since the BJP government came to power.

The DAC was also informed that 314 cases of procurement have still not fructified although 86 of them are in final stages of sanction.

Defence ministry sources said that Parrikar directed the officials that all efforts should be made to clear maximum pending projects during the next 4-5 months.

Industry sources believe that the process of defence acquisition is likely to pick up pace after the new Defence Procurement Procedure (DPP) 2016 is notified.

It is likely to be notified by the defence ministry in first week of April. The new Defence Procurement Procedure was announced by Parrikar in January to simplify and expedite the procurement process.

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