The Hindu Business Line : Ministry mulls body to do biz with SMEs

THE Union Ministry of Defence is contemplating establishing a permanent body for maintaining a link between the defence purchase authority and small and medium enterprises (SMEs).

This was announced by the Defence Minister, Mr Pranab Mukherjee. The objective of such a body would be to extend support to SMEs to improve quality and service to match defence requirements, he said.

Addressing a business meet here on `Opportunity of doing business with defence,' Mr Mukherjee said that there was scope for the private sector to get involved in manufacturing activities for the defence sector. The scope was not confined to large enterprises and even SMEs could play a role. Incidentally, eight defence PSUs outsourced about Rs1,900 crore worth of goods and services from the private sector in 2004-05. The volume of outsourcing might be doubled and diversified in the coming years.

The business meet was held at the venue of the 19th Industrial India trade fair, which has been organised by the Bengal National Chamber of Commerce & Industry, West Bengal Government and India Trade Promotion Organisation.

Responding to a suggestion by the chairman of the fair committee that the corporate sector could be permitted, in specific cases, to independently pursue development of technologies and defence systems, Mr Mukherjee said his Ministry was considering creating a special fund for the purpose of promoting research and development (R&D) activities in the private sector engaged in manufacturing activities for the defence sector.