New Delhi, Aug 27 (IANS) A new research paper published in the US-based Brookings Institution has recommended greater incentives for private investment in order to build self-reliance in the Indian defence industrial sector.
The paper titled ''The Indigenisation of India''s Defence Industry'' has argued for consistency in budgetary allocations and changes in the regulatory environment in order to increase competition, reduce costs and spur innovation in defence industrial production in the country.
The research paper has been written by Dhruva Jaishankar, Brookings scholar in Foreign Policy Studies.
"The political leadership should work with the Finance Ministry to ensure a sufficient overall defence budget with an appropriate allocation to capital expenditure, including R&D, in line with requirements," says the paper.
"The Defence and Finance Ministries, with arbitration from the political leadership, must find a durable yet flexible mechanism for multi-year expenditure for defence procurement, whether non-lapsable funds or multi-year budgets," it said.
The author has advocated the need for revisiting current policies governing defence procurement and production, including investment caps and offsets, to create better incentives for long-term private sector investment in defence, including in research and development.
According to the paper, the government must bring about changes to the Defence Procurement Procedure (DPP) in order to create a level playing field between Indian public and private sectors which will accelerate the process of indigenisation by increasing competition.
The paper argues that it is the primary responsibility of the three armed services to articulate their short-, medium- and long-term quantitative requirements for equipment taking into consideration issues including technological costs, quality and export potential.
This planning should be led by the Integrated Defence Services and the process should be revisited periodically.
The paper surmises that defence production is yet to catch up in the country because normal rules of market economics do not apply to this sector while ideal objectives of quality, cost, and timeframes cannot be achieved simultaneously.
Defence budgets in the country have remained susceptible to cuts. Moreover, while the nature of defence supply chains is changing, little heed has been paid to policies to maximise technological absorption, it said.