Dear Readers,

Subho bijoya and happy ensuing Dipawali.

We pray to the Mother of the Universe, Ma Durga, to bestow Her motherly love and blessings to all. Mother is the destroyer of evil. She protects the righteous. She is omnipresent, omniscient and omnipotent. The Mother of the Universe says, “O Children! Worship not from outside with glamour and pomp. Worship me from the heart drenched with tears of love.” She is in our heart. Sing the songs of Her love from the bottom of your heart. Sing the song of love of the soul for Her. Live in harmony and peace with all and work for the welfare of all. Be good and do good to others, and be assured that Ma Durga will answer your prayers.

Defence: ‛Make in India’

India spends a large portion of her revenue on defence. It is the fifth largest defence spender. It has the second largest military in the world, next only to China. It is one of the largest importers of defence equipment. About 60% of the country’s defence equipment is imported. One of the focus areas of government’s ‘Make in India’ initiative is to step up defence equipment manufacturing in India. It has opened the defence sector for private sector participation. Foreign original equipment manufacturers (OEMs) are entering into strategic partnerships with India companies. Preference for procurement is given to Indian manufacturers of defence products. Policy measures like liberalisation of licensing, relaxing FDI norms by raising the cap on FDI, simplification of export procedure, and streamlining of defence offset guidelines have been taken.

Large defence projects are witnessing private sector involvement. The objectives of the defence production policy are to achieve self-reliance in the design, development, production and maintenance-repair-overhaul (MRO) of equipment/weapon systems. SMEs’ involvement is being encouraged in this sector.

The Defence Research and Development Organisation (DRDO) has developed a number of major products for defence and civilian purposes. Some of the products include the Light Combat Aircraft (LCA) Tejas, 52 Calibre Advance Towed Artillery Gun System (ATGS), Anti-Torpedo Decoys. The developments in the naval realm have also been promising. The government will set up a separate fund to provide necessary resources to the public/private sector including SMEs, as well as encourage academic and scientific institutions to support research and development of defence equipment & systems, enhancing cutting-edge technology.

The recent pro- industry policy initiatives by GOI are aimed on the one hand to make the country self- reliant and on the other hand at positioning India as one of the top five aerospace and defence industrial hub by 2025. However looking at the history of controversy from Bofors to Rafale it is imperative to formulate a transparent defence procurement policy. It is a matter of satisfaction that DPP-16 -Defence Procurement Policy 2016 announced recently arguably is the most comprehensive one till date. The most important part of this policy is its focus on indigenisation with the introduction of “Buy(INDIAN-IDDM)” category with domestic industry at its core.

The private sector needs to spend substantial funds on capital assets and products development. There is only one buyer, the government. Risk factors are manifold. The suggestion was to create a National Defence Manufacturing Council. Decision-making, approval, providing designs - all must be done in time. The decision-making bodies need greater autonomy. There is an urgent need of a permanent Arbitration Committee, which can settle disputes expeditiously and amicably, so that a unit can survive. There is a need to boost the confidence and morale of the private sector. Bridging the long-standing trust gap between the private sector and the government is of paramount importance, if defence manufacturing in India has to take off in a significant way. The government has to ensure a level playing field for the private sector, DROP, Defence Public Sector Undertaking (DPSU) and Ordnance Factories Board (OFB). In view of India’s strength in software, greater emphasis should be laid to develop cyber security by developing and manufacturing the ‘Chip’ indigenously.

Bold leadership is needed for successful implementation of the 'Make in India' policy in the defence sector. In case any of the decisions are taking time, it must be ensured that there is no witch-hunt. There should be no red-tapism in decision- aking. We do not need another situation like the present banking sector bad loan mess. It is always fraught with the risk of political controversy, particularly in view of the fact that there is one buyer, the government.

Indian economy – The rupee’s fall has caused panic in the stock market. It spells further trouble for companies that borrowed in foreign currency. The country is continuing to have a current-account deficit. To tackle the crisis of the rupee fall and rising crude oil prices, the government needs to take measures to control the widening current-account deficit.

The share of private investments in the infrastructure sector has fallen to 25% in FY18, the lowest in a decade. A plethora of stalled projects and stressed assets have dampened investors’ interests and risk appetites.

Investor sentiment has taken a hit. Some analysts have said that the fair value of NIFTY is 9,600 or 9,800. According to many of them, markets may correct by another 5-10%. The IL&FS default, a sharp surge in international oil prices and the continuous fall of the rupee have all contributed to the gloom in the market. After the IL&FS fiasco, almost all the financial service companies are being viewed with suspicion. NBFCs are the blood line for the small and medium groups of businesses. Faith and confidence in NBFCs is needed. India’s small and medium entrepreneurs will suffer immensely. State Bank of India (SBI) said on Tuesday that it will buy good-quality assets worth `45,000 crore from NBFCs to support them. Some more steps are needed from the government to tide over the situation and to soothe investor nerves.

RBI, in its last monetary review, decided to opt for status quo. While critics say that RBI should have acted to strengthen the rupee fall, the RBI governor has very categorically stated that RBI’s mandate is to target inflation, while its forex operation only sought to curb volatility. According to Governor Patel, the depreciation of the rupee has been moderate compared to other emerging market peers.

May Mother Durga bless Bharatwasi to work for inclusive and sustainable growth, harmony and peace, and to expel the ignorance of upper and lower caste treating all souls as fragment of one universal soul.   


Dr. H.P. Kanoria

Editor in chief     



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