₹75 Crore Does Not Mean ₹75 Crore to Spend

Episode 12 of Defence Procurement looks at the financial authority behind that process.

A common mistake is to hear that a particular headquarters or appointment has financial powers up to a certain amount and assume that anything below that value can be purchased. But the episode explains why that approach is incomplete.

The relevant question is: under which financial power can this particular requirement be sanctioned?

The episode breaks down the importance of the schedule, sub-schedule, Competent Financial Authority (CFA), IFA consultation, ceiling and applicable conditions. It also explains why financial authority and availability of funds are two separate things that must come together.

For defence companies, the business-development lesson is simple:

Requirement first. Financial powers later.

In the next episode, we look at two provisions particularly relevant to defence technology companies — Indigenisation and Research & Development (IR&D) and Army Commanders’ Special Financial Powers (ACSFP) — and the common mistake companies can make when trying to understand these two different routes.

Watch Episode 12 of Defence Procurement: A Practitioner’s Perspective from BharatShakti.