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Defence Ministry approves military acquisitions worth Rs 8,357 crore

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Defence Ministry approves military acquisitions worth Rs 8,357 crore

On March 22, 2022, The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath singh, accorded Acceptance of Necessity (AoN) for capital acquisition proposals of armed forces worth INR 8,357 crore. This will enhance the operational preparedness of the Armed forces.

i.All the AoN have been approved under ‘Buy (Indian IDDM [Indigenously Designed, Developed and Manufacture])’ category in order to encourage AtmaNirbhar Bharat

Key Highlights:

i.The approved proposals includes procurement of night sight (image intensifier), light vehicles GS 4X4, air defence fire control radar (light) and GSAT-7B satellite.

ii.The GSAT-7B satellite for the Army, in turn, will cost around Rs 4,600 crore. In November last year, the DAC had also given the initial nod to a Rs 2,236 crore proposal to launch the GSAT-7C satellite for IAF, which already has the GSAT-7A operational. The Navy, in turn, has had the GSAT-7 or Rukmini Satellite.

iii.The Defence Acquisition Council (DAC) in order to encourage innovation, accorded the sum of Rs 380.43 crore of the Acceptance of Necessity (AoN) for procurements to the iDEX startups and MSMEs.

iv.Also a simplified iDEX Procurement has been introduced: 

  • Acceptance of Necessity (AoN) to procurement timelines have been reduced from 2+ years to 5 months. 
  • The procurement cycle will be around 22 weeks as per the new procedure

v.The Defence Acquisition Council (DAC)  approved ‘effecting’ the following policy initiatives in the Defence Acquisition Procedure -2020:

  • All modernisation requirements of defence forces to be indigenously sourced and import to be resorted to only as exceptions.
  • To reduce financial burden on defence industry, requirement of the Integrity Pact Bank Guarantee (IPBG) is to be dispensed with. 
  • Also Earnest Money Deposit (EMD) to be introduced as bid security and Pre-Contract Integrity Pact (PCIP) cover upto contract stage. 

Note: EMD will be applicable only for proposals of Rs 100 Cr and above and MSMEs & Startups will be exempted from EMD.

About Innovations for Defence Excellence (iDEX) initiative:

i.The iDEX initiative was launched by the Hon’ble Prime Minister in April 2018, aims to achieve self – reliance and foster innovation and technology development in Defence and Aerospace.

ii.Under iDEX initiative, startups, MSMEs,individual innovators, R&D institutes and academia are engaged and funded by the Defence Ministry. 

About Ministry of Defence 

Union Minister – Rajnath Singh (Lok Sabha MP, Constituency – Lucknow, Uttarpradesh )
Minister of State – Ajay Bhatt ( Lok Sabha MP Constituency – Nainital-Udhamsingh Nagar, Uttarakhand )