Centre set to announce new defence supplier blacklisting policy :
Week 14-21 Feb,2016
● The defence ministry is likely to announce its new blacklisting policy for defence suppliers soon after the draft policy is approved by the defence acquisition council (DAC).
● Fifteen defence suppliers, including six foreign firms, are currently blacklisted by the defence ministry while 23 other companies are under scrutiny for allegations of corruption.
● Under the new policy, there will be no clause for automatic blacklisting. The punishment for corruption and wrongdoing by a defence manufacturer will be applied in a graded manner.
● After receipt of an initial complaint, the procurement process will be put on hold for a few weeks for a basic enquiry into the merits of the charge. If the charges are substantial and prima facie hold merit, it will lead to a suspension of the firm pending a full investigation.
● Once the charges of wrongdoing have been proved, there will be graded fiscal penalties applied against the erring firm.
● Only in extreme cases will the defence ministry resort to blacklisting of a company.
● Currently, a company can be barred from contracting with the government as soon as suspicion of wrongdoing emerges, and it remains blacklisted throughout the investigation. If the firm is prosecuted and convicted, it can be debarred for up to 10 years.
● The policy of immediate blacklisting had stalled India’s defence acquisitions programme under the UPA and raised concerns about the preparedness of the armed forces.
● It was also being used, many defence manufacturers allege, to create monopolies by getting their competitors blacklisted on anonymous charges of wrongdoing.
● The Dhirendra Singh committee on revision of DPP had also recommended that while “a robust system of preventing corruption is put in place and punishment for corrupt practices is swiftly meted out, it should not hamper ongoing purchase efforts”.