- Ministry of defence (MoD) panel, asks to Keep low credit-rated and debt-ridden companies out of major defence projects under ‘Make in India’.
- The panel has proposed companies need to have a minimum credit rating of ICRA B++ and a net worth that’s 40% of development cost of the project.
- For very large, strategic projects, companies seeking contracts must also not be in the midst of corporate debt restructuring (CDR).
- Panel suggests that as per the global practice, government should invest in building up only two private sector shipbuilding companies and should merge all public warship building yards into a single corporate entity.
- Projects under the Make (India) category are the most coveted for private firms as the government guarantees a minimum order and also takes care of 80% of the development and engineering (D&E) costs.
- The panel’s recommendations will be studied by the defence ministry. Final proposals are likely to be finalised within three months.