HAL needs a makeover

Much has been said about what Narendra Modi has done and not done in his one year as Prime Minister. One aspect that has gone relatively unnoticed is the change in defence equipment procurement procedure that his government is putting in place.

Earlier this month, the Defence Acquisition Council, the highest decision-making body on buying military hardware, cleared a Rs.11,930 crore proposal to build military transport aircraft in India. This deal bypassed the government-owned Hindustan Aeronautics Ltd (HAL) in favour of Tata Advanced Systems Ltd. The recent decision to buy 36 Rafale fighter jets directly from France was another snub to HAL.

HAL badly needs an infusion of technology and money. One way to do that could be by bringing in new partners for the public sector undertaking to rejuvenate the company in return for a stake in it. By doing so, the government will save itself opprobrium that may come its way if it were to sell a stake in the aircraft maker only to raise revenue.

 

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