DAC Current Affairs - 2019

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DAC approves major changes in Defence Procurement Procedure

The Defence Acquisition Council (DAC) chaired by Union Defence Minister Manohar Parrikar has approved major changes in the new Defence Procurement Procedure (DDP) 2016.

These changes were made in DPP 2016 to streamline defence acquisitions and give a big impetus to indigenisation of Defence sector through the ‘Make in India’ initiative.

Some of the changes were based on recommendations of the expert committee headed by former Home Secretary Dhirendra Singh.

Major Changes are

  • Addition of new category to promote domestic manufacturing, including government funding.
  • The funding will be mainly in technology development for Research & Development (R&D) and recognition of the Micro, Small and Medium Enterprises (MSME).
  • New category Indigenously Designed, Developed and Manufactured (IDDM) platforms have been added and it will be the priority route for procurements.
  • Under IDDM, there will be two sub-categories one with mandatory 40 percent domestic content for a domestic design.
  • Other will be for mandating 60 percent local content if the design is not domestic. Under it, eligible domestic companies will have majority Indian control and operated by Indian nationals.
  • Government will fund private R&D for building a defence technology base in the country for which various norms have been stipulated. Under it companies are eligible for up to 90 percent funding.
  • Contentious issue of offsets has been amended from the current 300 crore rupees to 2000 crore rupees to give flexibility for foreign companies.
  • Currently, offset clause mandates that a foreign company should invest 30 percent of the contract value back into the country with a view to bring in technology.

DAC gives nod to purchase of Russian S-400 Air Defence Missile Systems

Defence Acquisition Council (DAC) has cleared the purchase of Russian advance S-400 Trium Air Defence Missile Systems at an estimated cost of 40,000 crore rupees.

Decision in this regard was taken by DAC meeting chaired by Union Defence Minister Manohar Parrikar in New Delhi. DAC approval for defence deal comes ahead of Prime Minister Narendra Modi’s visit to Russia later in December 2015.

India would buy 5 units of the S-400 Trium air defence missile systems that are capable of destroying incoming hostile missiles, aircraft and even drones within a range of up to 400 km. This purchase will give a major boost to the national air defence capacity and make India only the second buyer of the missile system after China. The S-400 System is also capable of taking out ballistic missiles and hypersonic targets.

DAC also gave approval for

  • Indian Army’s proposal for the purchase of 6 regiments of the Pinaka rocket system under the ‘Make in India’ category for 14,600 crore rupees.
  • Each regiment of the Pinaka rocket system comes with 18 launchers and every launcher has the capability of firing 12 rockets at the same time.
  • Indian Army’s demand for 571 light bullet-proof vehicles to be used in counter-terrorism and counter-insurgency operations. It was cleared at a cost of 310 crore rupees.
  • Purchase of 120 trawls to be used on Russia-origin T-72 and T-90 tanks under Buy Global category for 450 crore rupees.

It should be noted that DAC is the apex body of Union Defence Ministry for clearing defence procurement proposals forwarded by the Indian Army, Navy and Air Force.