No separate guidelines for JVs of defence PSUs -Governance Now

No separate guidelines for JVs of defence PSUs

The guidelines issued by the DPE and the finance ministry will now also be applicable for the defence PSUs to set up joint venture companies.

GN Bureau | July 28, 2016

#Defence PSUs #finance ministry #joint venture

The government has decided to end existing guidelines for establishing joint venture (JV) companies by defence public sector undertakings (PSUs). The cabinet’s decision will provide a level-playing field in forging partnerships for defence PSUs such as Mazagon Dock, Goa Shipyard, Garden Reach Shipbuilders and Engineers, Bharat Electronics, Hindustan Aeronautics, Bharat Earth Movers, Bharat Dynamics, Mishra Dhatu Nigam, and Hindustan Shipyard.

The guidelines issued by the department of public enterprises (DPE) and the finance ministry from time to time will now also be applicable for the defence PSUs to set up JV companies.

The abolition of the existing JV guidelines will provide a level-playing field between defence PSUs and the private sector, as it will allow defence PSUs to forge partnerships in an innovative manner enhancing self-reliance in defence and providing for enhanced accountability and autonomy of defence PSUs.

There were issues regarding the operationalisation of JV guidelines of defence PSUs. The department of defence production came to the conclusion that with the increasing participation of the private sector in the defence sector and the transformation taking place in the defence acquisition ecosystem, the requirement of having separate JV guidelines for defence PSUs is no longer considered necessary.

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