IAF slams HAL, political interference in procurement, bats for private sector - Broadsword by Ajai Shukla - Strategy. Economics. Defence.

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Thursday 19 November 2009

IAF slams HAL, political interference in procurement, bats for private sector

Photo: IAF Vice Chief, Air Marshall Pranab Kumar Barbora, who is setting the bar for plain-speaking by senior military officers

by Ajai Shukla
Business Standard, 20th Nov 09

Private sector companies engaged in aerospace manufacture and R&D now have an influential new supporter: The Indian Air Force (IAF). In New Delhi today, the IAF’s vice chief, Air Marshall Pranab Kumar Barbora forcefully called for government policy changes to encourage the private sector in aerospace production, to kickstart a sector that has long been dominated by public sector Hindustan Aeronautics Ltd (HAL).

Industry bodies like the Confederation of Indian Industry (CII) have pushed these measures earlier. But the military has so far toed the Ministry of Defence (MoD) line, which automatically grants Defence Public Sector Units (DPSUs) like HAL a predominant position, effectively confining private companies to the ancillary supply of aircraft sub-systems.

But Air Marshall Barbora, a blunt-speaking MiG-21 veteran with a reputation for plain speaking on controversial matters, contrasted the private sector’s success in modernising more than 50 airbases, with HAL’s dismal export performance.

Pointing out that even Pakistan had more defence exports than India, the IAF vice chief said, “I visited HAL a few days back. They are proud that they are making parts for Airbus. But a few days back, China produced the whole Airbus. We are happy producing a door here and something else there.”

Air Marshall Barbora listed out policy changes that the government urgently needed to implement to energise the private sector. These included:

  • Government must fund R&D and manufacture by private companies, like it has done for the DPSUs. “They (private sector) have to be part of the new structure. If you don’t give them finance, they won’t come up.”

  • Assuring firm orders (or Minimum Order Quantity) to private companies, which will allow them to recover the money they spend in developing a product. “If they know they have to produce 1,000 of this, they will be willing to invest.”

  • Removing government curbs on defence exports by the private sector, to allow them to recover investment costs. “Our own [defence] requirements are miniscule. If you don’t allow private companies to export, he will say, ‘you look after yourself, I’ll look after myself.’”

  • Addressing “the CVC syndrome”, in which “anyone can file an FIR and everything comes on hold”. The IAF deputy declared that procurement processes must go on without disruptions by motivated allegations of corruption.

  • Increase the Foreign Direct Investment limit, which is currently 26 per cent. “We have taken steps, but they are not bold enough. We have to be bolder, to invite more investment.”

The IAF deputy also slammed political parties for criticising and scanning defence contracts signed by the previous government, each time power changed hands. Air Marshall Barbora said, “The government becomes the opposition and the opposition becomes the government and blocks everything. That impinges very badly on defence.”

Pointing out that dependence on defence imports remained an Indian vulnerability, the IAF deputy slammed the US for placing sanctions on India after the Pokhran nuclear tests. Holding France up as a model to follow, Air Marshall Barbora said, “France said that, by so and so year, we will go fully indigenous. And they did that. [After that] France blasted all the nuclear devices that they wanted in the Pacific Ocean and nobody could do anything, because they had indigenised [defence production].”

According to a CII-Ernst and Young report, India has over 6,000 SMEs supplying DPSUs, Ordnance Factories, DRDO and the armed forces with 20–25 per cent of their total requirement of components and sub-assemblies. In addition, there are almost a hundred large private companies involved in defence manufacture.

These recommendations were made at a seminar on “Energising Indian Aerospace Industry” in New Delhi.

IAF Recommendations:
  • Fund R&D and manufacture by private sector
  • Assured orders to recover investments
  • Remove curbs on defence exports
  • Minimise disruption of procurement
  • Increase FDI limits from 26%


  1. Very well said, but these people keep raising the requirements and does not encourage indigenous efforts. The hard work and efforts are thrown to wind and the best example is the kaveri engine for LCA. Instead nurturing the babe(engine), they did not even care to order at least few engines and they talk about PUSs quest for indigenous. on the other hand it would have been better if the PSUs were time conscious.

  2. very well said hi.

  3. So how long before he is chucked out ?

  4. At least someone with balls of steel !!!

  5. Now Heres a real leader .. much better than the people before him who toes the line of the politicians and then vanished into history.. Go sir make your mark ... the nation ( not the greedy politicians) is behind you

  6. http://www.business-standard.com/india/news/hal-to-invest-rs-25000-cr-in-next-10-years/78837/on

  7. HAL chief says LCH will fly pretty soon.........ooopss.....can be 2 weeks.....8 weeeks.......10 weeksss........


  8. This idiot IAF oerson has to go and more over nobody can every compete with HAL and he probably is forgetting that it is HAL with its indigenous ALH that bbrought india on the world defense export market and people remember LCA is not all HAL infact it has very little HAL content and interference

  9. Ajay,

    do u think these dimwit and dumb ass politicians will say yes to barbora remarks?

    Private companies are often working on wafer margins most of the time.But these PSU are sequentially failing.

  10. WOW... Now someone has the guts! Feeling good to see some capable people leading our armed forces.

    Our politicians watch their pocket first. If Indian private sector goes forward how they will fill their pockets? Now every defence deal has some cases.

    The IAF and the GoI knows very well what to do but the leaders will not do anything that donot fill their pockets. Looks like IAF is bit frustrated with Babus and Netas.

  11. A Leader is not someone who sits on the fence assumes status quo. A leader is someone who is not afraid to point out mistakes and give concrete directions to correct them. No chatla hai buseness here

    Great Job... Love this guy....

  12. If we want to move fast on Indignation of Defense Equipments, Government has to dilute its stake in the Defense PSU's by issuing the shares to the General Public ( Note : Not to a Strategic Private Investor)

    This will make companies like HAL, DRDO & ISRO independent of political intervention. Since they are answerable to Share holders their management will drive the companies towards profitability.

  13. Great job!

    Whatever he said is not anything new, everyone knows that. But we are hearing this for the first time from a senior military officer.

    Now they are talking open, I think they are frustrated with our 'leaders'.

    I want him as the Defence Minister of India. He knows reality than those corrupted leaders. He knows how to improve India's defence and save India.

  14. Once the private sector comes upto the level of HAL he will start criticising them too and recommend direct imports.
    In World War 2, the allies did not have the best of weapons against the rival but good logistics and support network.
    China messed with US much before their economic might was up to the level today. Yet they first built good nuke missiles that could reach rival's cities. And with deterence established then they did everything indigenous no matter how inferior. And here we have these people who want top of the line stuff from the word "go" and just want to import. Well said 'hi'. These guys don't support any indegenous stuff and keep raising demands to a level that would kill local developments and then left with no choice they will import.

  15. Let this guy walk the talk & then maybe we will believe he's all steel & guts. The IAF & the Army should take a leaf out of the Navy's book

  16. At least some one has guts to say these things while in service.

    Hope this guy will be their for few more years to come and some thing positive would come out of this.

    Although i am dont underestimate defence delears and foreigh companies, who can go to any length to achive their interests.

  17. keep watching! after retirement this same guy who lambasted HAL may start selling bell helos or israeli arms or russian junk to inida as resident representative! If there is a problem in the forward areas ,HAL personnel are kicked in the ass and are made to go in the midst of the night! can he do the same thing to the rusiians ,the israelis and all the other phirangis? dont say that their systems never fail!

  18. A real guy with real patriotic thinking .

  19. privatization will excel our defense R&d faster that of now...since India spending huge amount of money in defense procurement....Political party interference is one of the major constraint in defense deal...so that was indeed great job by the chief.....

  20. Hi Anonymous,
    Re your last salvo. I doubt he will sell arms for foreign companies after retirement.But even if he does, so what? At least he'll do an honest job of it, the way he has done everywhere.
    Also, if HAL guys get kicked about, as u put it, then they are only getting their just dues. Try holding them responsible for even the most blatant negligence and it gets u nowhere. So what's a little (figuratively speaking, as u are) "kicking", eh?
    Ultimately, its all about improving things, right? So what better place to begin, than recognising where problems lie?


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