Union Defence Minister Rajnath Singh on Saturday stated that the government is according top priority to self-reliance in defence, in view of the ever-changing security scenario.
Singh was delivering the inaugural address at the MSME Conclave, organised by the Department of Defence Production, Ministry of Defence in partnership with Society of Indian Defence Manufacturers (SIDM) in hybrid mode, in New Delhi on Saturday.
Pointing out that there is a need to move forward to unleash the full potential of MSMEs in the sector, Singh called upon Micro, Small and Medium Enterprises (MSMEs) to invest more in research and development and manufacture new products and technologies and thereby contribute to the security and progress of the country.
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The minister urged MSMEs and SIDM to create an industrial base in India, on the lines of 'Mittelstand' (Mittel-Stunt) of Germany, which has been recognised by the whole world for manufacturing metal equipment. He termed MSMEs the backbone of the industry which is equally responsible for not only economic activities but also social development.
"Today, there is a sizeable number of MSMEs in our country, which contribute 29 per cent to our GDP through their national and international trade. After the agriculture sector, it is the biggest source of providing employment to about 100 million people.
"MSMEs also work to involve innovators and mediators in large enterprises. They help to fulfill the objectives of large industrial entities by becoming an important part of the value chain and supply chain," he added.
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The Raksha Mantri pointed out that MSMEs can definitely play a big role in empowering the youth of the country financially and fulfilling their dreams, he said.
“We brought policies related to banking and capital market so that our MSMEs can get maximum capital easily and at cheap rates. We came out with the policy of value chain integration and establishment of common facilities, industrial parks and two defence industrial corridors to reduce the fixed cost of MSMEs,” Singh said while voicing the Government’s commitment to tap the full potential of MSMEs.
He listed out some of the initiatives which aim to promote indigenous design, development and manufacturing of defence and aerospace equipment in the country under 'Make in India' by harnessing the capabilities of public and private sector especially MSMEs.
“We have an estimated Rs 85,000 crore industry of aerospace and defence. The contribution of the private sector in this has increased to Rs 18,000 crore. Our vision to make India a global defence manufacturing hub,” he said.
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The ministry stated that steps taken to encourage MSMEs include issuance of Request for Proposal (RFP) to MSMEs without any financial condition in cases of procurement where the estimated cost does not exceed Rs 100 crore/year or the total value is less than Rs 150 crore, whichever is higher; earmarking of projects under Make categories, procurement of which does not exceed Rs 100 crore/year based on the delivery schedule at the time of Acceptance of Necessity (AoN) demand and revised Offset Policy 2020 where the Indian offset partner is an MSME.
Singh added that projects under Innovation for Defence Excellence (iDEX) and Technology development Fund (TDF) scheme are mainly reserved for startups and MSMEs. “These schemes extend financial assistance for development of defence technology and hand-holding by user services, thus providing necessary impetus to MSMEs, startups and individual innovators. They are being funded with financial grants to provide innovative solutions to the problem statements prepared by the Services and new technologies like Artificial Intelligence, Data Analytics and Robotics can be used,” he said.
The Raksha Mantri also mentioned about Ministry of Defence’s approval of a central sector scheme for iDEX with a budgetary support of about Rs 500 crore for the next five years from 2021-22 to 2025-26. The scheme will provide financial assistance to around 300 start-ups/MSMEs/individual innovators and about 20 partner incubators through Defence Innovation Organisation (DIO). He further said that the Ministry has earmarked Rs 1,000 crore for procurement from iDEX start-ups during 2021-22 to promote the development of new defence technologies and support the growing start-ups base in the country. He appreciated the fact at present more than 30 projects are in progress under TDF and over Rs 150 crore outlay has been utilised.
Singh spoke about the 'Dare to Dream' innovation contest of Defence Research and Development Organisation (DRDO) which is a tribute to former President of India and eminent scientist Dr APJ Abdul Kalam. The contest enlists startups under the TDF scheme and provides them with financial and hand-holding support to develop cutting edge technologies & military products. He expressed confidence that the Indian industry will soon become a state-of-the-art technology provider not only for the Indian Armed Forces, but for the global market as well.
Several thousand MSMEs are working in different sectors and are generally connected as Tiered Partners with various government establishments and large private sector OEMs. One of the key objectives of the ‘Make in India’ initiative is to bring MSMEs into the defence supply chain, thereby boosting self-reliance in defence and contributing in the defence exports market., the ministry added.
