As the country gears up to negotiate mega defence deals running into billions of dollars, Defence Minister Pranab Mukherjee on Tuesday declared that no middlemen will be allowed in such deals.
"There is a ban in force on middlemen," Mukherjee said while elaborating that as per the norms laid out by the new arms procurement policy, all weapon sellers will have to sign integrity pacts, binding them not to use middlemen in deals.
This is part of drive not to allow men of doubtful character to roam around South Block, Defence Secretary Shekar Dutt said.
Though middlemen are banned in weapons deals, Mukherjee said the ban will not be applicable to duly registered arms agents.
Speaking at a FICCI sponsored seminar on 'Public-Private parternship in Defence procurements,' in New Delhi, the minister said the government will soon announce new procedures to make it easier and mandatory for all arms agents to register themselves with not only the Defence ministry, but also Reserve Bank.
Though registration of arms agents had been legalised by the erstwhile National Democratic Alliance regime, Mukherjee said there were hardly any takers.
"Only a handful of firms had sought registration," he said pointing out that the United Progressive Alliance government was in process of streamlining procedures, so that all arms agents got registered.
On the occasion, the Defence ministry stoutly defended the Defence Research and Development Organisation urging the nation to have patience and faith in country's defence scientists.
"In indigenous arms platforms projects, you can't expect made-to-order systems. Development of critical technologies for missiles, aircraft and tanks have a gestation period," he said.
"Time and costs overruns in such projects have to be taken into stride," Mukherjee said.
"Indigenous projects in critical systems have to be kept alive," the Defence Minister said pointing out that India had a bitter experience in dependence on outside sources for defence equipments.
"The availability of high-end technology is made difficult by technology-denial regimes and Nations that rely on imported weapons systems are vulnerable to sudden cessation of supplies during war," he said.
"India has been in the past also been adversely impacted by such policies of supplier nations," Mukherjee said emphasizing that the country goal should be to strive for maximum self sufficency.
Telling the audience comprising Industry captains and Chief Executive officers that modernisation drive in the armed forces was in full swing, the minister said time had come for private sector to play a more meaningful role in the country's defence.
He said capital expenditure in defence had been increased to Rs 37,458 crore in 2006-07 from Rs 12,384 crore in 2000-01 and this represented a boost of almost 202 per cent.
"As the defence expenditure is growing our earnest desire is to see the Indian industry and the society benefit from the spinoffs that such a growth would engender," he said.
The minister also outlined the new steps and initiatives taken by the government to all the Indian industry a required level playing field. He said under the new low technology mature systems categorize d as 'buy Indian' will have a minimum of 50 per cent indigenous content that would provide the local industry opportunities to even use existing level of technology to achieve the mandatory 50 per cent indigenous content.
Similarly, he said under the category high technology complex systems will also provide the domestic industry to take its rightful share by Private-Public participation.
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