The Union Government has begun the procedure to divest its stake in Hindustan Aeronautics Limited (HAL), Union Minister of State for Defence M.M. Pallam Raju said on Friday, adding that the overstretched government-owned company has not been able to meet the expectations of the armed forces.
The Government has “the will” to bring about disinvestment in HAL, and “is going through its procedures,” Mr. Raju told presspersons on the sidelines of Defexpo-2012, an international exhibition for defence, aerospace and homeland security organised by the National Small Industries Corporation.
While HAL “has been playing a great role” in defence manufacturing and in helping the country achieve self-reliance in the sector, the public sector undertaking cannot meet the expectations of the armed forces, especially the Air Force, in terms of delivery schedule, he added.
“There is no question of the lack of competence or of facilities, but it is a matter of management,” Mr. Raju said.
“They are handling so many programmes… We do not want them to [produce] minor components like nuts and bolts, which was what they were doing.” The primary concerns of MSMEs in the aerospace sector include the lack of adequate and timely credit, problems of technology, the procurement of raw material at competitive prices and getting land and environmental clearances, said S.V. Ranganath, Chief Secretary to the Government of Karnataka.
A high-level empowered committee had been formed to address the concerns of investors and will meet every 15 days in the run up to the Global Investors Meet in June, he said.
It is important for Indian companies to integrate themselves into the supply chains of national and international majors in order to gain a foothold in the Defence market, said Virbhadra Singh, Union Minister for MSME.
Close to 200 exhibitors, from the Defence, space and homeland security sectors — including Boeing, Rolls Royce, Bharat Electronics Limited, National Aerospace Laboratories and ISRO — took part in the expo.