Defence Testing Infrastructure Scheme (DTIS)

Defence Testing Infrastructure Scheme (DTIS)

The government has approved the launch of Defence Testing Infrastructure Scheme (DTIS) with an outlay of Rs 400 crore.

Defence Testing Infrastructure Scheme (DTIS)

Source | Press Information Bureau

GS Paper II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context: In order to give a boost to domestic defence and aerospace manufacturing, the government has approved the launch of Defence Testing Infrastructure Scheme (DTIS) with an outlay of Rs 400 crore.

Defence Testing Infrastructure Scheme (DTIS)


What you need to know about Defence Testing Infrastructure Scheme (DTIS)?

  • The Defence Testing Infrastructure Scheme envisages to setup six to eight new test facilities in partnership with private industry.
    • This will facilitate indigenous defence production, consequently reduce imports of military equipment and help make the country self-reliant.
  • The projects under the Scheme will be provided with up to 75% government funding in the form of ‘Grant-in-Aid’.
    • The remaining 25% of the project cost will have to be borne by the Special Purpose Vehicle (SPV) whose constituents will be Indian private entities and State Governments.
    • The SPVs under the Scheme will be registered under Companies Act 2013 and shall also operate and maintain all assets under the Scheme, in a self-sustainable manner by collecting user charges.
  • While majority of test facilities are expected to come up in the two Defence Industrial Corridors (DICs), the Scheme is not limited to setting up Test Facilities in the DICs only.

Also Read: Trends in World Military Expenditure, 2019 – SIPRI


PRELIMS Background Bites

What you need to know about Defence Corridors in India?

  • Defence corridors are routes that will facilitate a well-planned and efficient industrial base that will lead to increased defence production in the country.
  • Recently, the Government has set up defence industrial corridors in Uttar Pradesh and Tamil Nadu.
    • Connecting Cities in Uttar Pradesh Defence Industrial Corridor (6): Lucknow, Kanpur, Agra, Aligarh, Chitrakoot and Jhansi.
    • Connecting Cities in Tamil Nadu Defence Industrial Corridor (5): Chennai, Hosur, Salem, Coimbatore and Tiruchirappalli.
  • The corridors overlap with existing defence public sector companies, and aim to ensure connectivity among various defence industrial units.

What is a Special Purpose Vehicle (SPV)?

  • A special purpose vehicle, also called a special purpose entity (SPE), is a subsidiary created by a parent company to isolate financial risk.
  • Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt.
  • A special purpose vehicle is sometimes called a bankruptcy-remote entity.
  • If accounting loopholes are exploited, these vehicles can become a financially devastating way to hide company debt.

What is Grant-in-aid?

  • A grant-in-aid is money coming from a central government for a specific project.
  • This kind of funding is usually used when the government and parliament have decided that the recipient should be publicly funded but operate with reasonable independence from the state.
  • The constitution provides for mainly two types of grants-in-aid viz. statutory grants and discretionary grants:
Statutory Grants
  • Article 275 makes provisions for statutory grants to needy states {not every state}.
  • These are charged on Consolidated Fund of India.
  • Such grants also include specific grants for promoting the welfare of the scheduled tribes in a state or for raising the level of administration of the scheduled areas in a state including the State of Assam.
  • The bases of these grants are recommendations of finance commission.
Discretionary Grants
  • Under article 282, both centre and states are able to make any grants for public purpose even if they are not within their legislative competence.
  • Since such grants are discretionary, there are no obligations to make such grants.

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