New Delhi: Defence Secretary Rajesh Kumar Singh is looking to double the value of the total number of contracts signed by the ministry this fiscal as compared to the last.
Singh also underlined that the year 2025 would see large reforms being initiated to cut down on the long procurement timelines, an issue which has been red-flagged by the domestic as well as the foreign industry.
What matters in defence is not annual allocation, but the “number of contracts one is ready to sign up which determines your pace of expenditure,” the defence secretary asserted.
“Let me assure you (that) we are on pace right now to sign the largest number of contracts ever in our history. Last year was another high of Rs 1.8 lakh crore. This year, we have already hit Rs 1.15 lakh crore, and my intent is to double last year’s number before the end of this financial year,” he said at a budget discussion hosted by CNBC. “I intend to cross Rs 2 lakh crore and may be even more.”
His comments came even as the defence ministry had to return unspent funds worth Rs 13,000 crore from its 2024-25 budget due to failure of the Services to utilise them
The Modi government has allocated Rs 6.81 lakh crore for the Ministry of Defence (MoD) for the financial year 2025-26. Of this total budget, Rs 1.80 lakh crore was set aside for capital outlay on defence services.
Singh underlined that from the day he took office in November last year, his focus has been on procurement. “That is an area which has been bedeviled by delays. We have identified where the delays are. It is in three specific areas,” he said, adding that the first is at the Services front in finalizing the Request for Proposal (RFP).
Incidentally, the longest pending RFP is the one for 114 fighter jets that the Indian Air Force (IAF) is supposed to issue but is awaiting clearance from the government.
The next delay, according to the defence secretary, is “in what they call the field evaluation trials and thereafter delays in what they call cost negotiations”.
“All of them take years at a time,” he added.
Multiple industry sources said that the evaluation trials are very long and take years to be completed because of the way it is designed. However, the Services argue that many times it is those participating in trials who keep seeking extensions and changes which are allowed under the framed rules.
“We are going to ensure accountability in terms of much shorter timelines and that I said I intend to ensure that our contracts this year are double if not triple of last year,” the defence secretary said, regarding the identified areas of delay.
Singh further said he was trying to ensure that order books are full across the defence industry so that everyone has visibility, everybody on the same page – from original equipment manufacturer to component manufacturers.
When it comes to foreign players, he said, the format of the C-295 deal or similar templates will be followed. While 16 C-295 aircraft are to be manufactured in Seville, Spain, and delivered to the IAF in ‘fly-away’ condition, 40 more would be manufactured and assembled by Tata Advanced Systems (TASL) in India as part of an industrial partnership with Airbus.
“If you want a slice of (Indian) defence pie, you have to be making it in India. In fact, make it for the world,” Singh said.
Efforts were being made to ensure easier transfer of technology of systems developed by the Defence Research and Development Organisation (DRDO) to the private industry, the defence secretary said, adding that the DRDO would also gain efficiency from the private sector’s manufacturing capability.
(Edited by Tony Rai)
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