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New Delhi, May 23, 2020
Defence Minister Rajnath Singh has said that defence manufacturing was among areas adversely affected due to the coronavirus (COVID-19) pandemic.
Addressing an MSME e-conclave via video conference here on Thursday, the Minister expressed appreciation for the role played by Society of Indian Defence Manufacturers (SIDM) and other Micro, Small and Medium Enterprises (MSMEs) in the nation’s fight against the disease.
“Manufacturing sector has been affected the most due to lockdown and disruption in existing supply chains and the defence sector is no exception to this. Rather, it can be said that the defence sector is more aggravated than other sectors as the only buyer of defence products is the government,” Rajnath Singh said.
To tackle these challenges, the Defence Ministry has taken several steps including the extension of response dates of RFP/RFI, early clearance of pending payments, etc. In this crisis, several financial support measures have been announced by the Government and RBI to reduce the financial burden of the industries. These will provide some relief due to the availability of additional working capital, deferment in interest payments, he added.
The conclave was jointly organised by SIDM, Confederation of Indian Industry (CII) and the Department of Defence Production.
The SIDM has conducted many interactions with senior officials of the Ministry and the Armed Forces since the lockdown came into force. This has given an opportunity to get to know the problems of defence industries and many suggestions for their prevention have also been received from SIDM, he said.
“I am very happy to know that SIDM has accelerated the manufacturing of DRDO [Defence Research and Development Organisation] designed PPE [Personal Protective Equipment] kits, masks, ventilator parts in the field of defence industry by efficient coordination and channelisation. Within less than two months, we have not only met our domestic demand, but we can also think of helping neighbouring countries in the coming time,” he added.
He termed MSMEs the backbone of Indian economy that accelerate GDP growth, earn valuable foreign exchange through exports and provide employment opportunities. Keeping MSMEs strong is one of the priorities of the Government. He said, “There are more than 8,000 MSMEs, tiered partners of many of our organisations - Ordnance factories, DPSUs and service organisations. They contribute more than 20% of the total production of these organisations.”
The Minister said the 'Aatma Nirbhar Bharat' campaign, inspired by Prime Minister Narendra Modi, will provide many opportunities to Indian industry and will help in restoring millions of jobs.
“Prime Minister Narendra Modi has called for being 'vocal for local' in this direction. I would like to say that we have to have our indigenous products, 'vocal for local', but before that in our own life, 'local' has to be focal. That is, we have to adopt 'swadeshi' products in our life. There is no doubt that MSMEs have a very important role in the goal of indigenous manufacturing, and in the goal of self-reliant India,” he added.
He mentioned some of the measures announced by Finance Minister Smt Nirmala Sitharaman under ‘Aatma Nirbhar Bharat’ scheme. Collateral free loan of 3 lakh crores for MSMEs - this will be effective in re-establishing about 45 lakh units and saving employment. Subordinate debt provision of Rs 20,000 crore has been announced for two lakh MSMEs, this will help stressed MSMEs. Equity infusion of Rs 50,000 crore will be provided through ‘Mother-Daughter Fund’ for the purpose of benefiting the needy MSMEs. A Rs 10,000 crore 'Fund of Funds' will be set up to help increase the capacity of these units and for marketing.
The definition of MSME has been revised so that MSMEs can be expanded. At the same time there will be no distinction between manufacturing and services sector MSMEs. In government contracts (procurements) of value Rs 200 crores or less, global tenders will not be allowed.
This will help MSMEs to grow their business. In the event of being unable to participate in trade fairs due to COVID-19, e-market linkages will be ensured. Government and PSUs will also ensure the clearance of all outstanding payments in the next 45 days.
The theme of the E-conclave was ‘Business Continuity for MSMEs in Defence & Aerospace Sector’ in which more than 800 Defence MSMEs participated.
Citing the example of the United States where domestic defence industry developed within a short span of two years during the World War-II, Chief of Defence Staff General Bipin Rawat said India should have its own defence industry. He urged the MSMEs to work for placing India among the top ten nations in defence technologies.
Secretary (Defence Production) Raj Kumar in his address highlighted the measures taken to alleviate the hardships faced by defence manufacturing industry due to COVID-19. The DPSUs have been asked to clear payments of MSMEs, and also announced that their production targets have not been scaled down. Citing the reforms recently announced by the Finance Minister, he said these measures will help realise the target of achieving a USD 25 billion defence production by 2025.
President of SIDM Jayant D Patil, former president of SIDM Baba N Kalyani, Director General of CII Chandrajit Banerjee, senior civil and military officials of MoD, Ordnance Factory Board and DPSUs were also present on the occasion.