NEW DELHI: Defence Minister Rajnath Singh on Friday reviewed the working of the seven state-run defence companies which were carved out of the erstwhile Ordnance Factory Board (OFB).
For 2022-23 fiscal, the seven new defence public sector undertakings (DPSUs) have projected cumulative sales target of around Rs 17,000 crore, which is significantly higher compared to previous achievements of erstwhile OFB, according to the defence ministry.
The companies commenced operations from October 1 last year before they were dedicated to the nation by Prime Minister Narendra Modi on the occasion of ‘Vijayadashami’ on October 15.
Addressing the officers and employees of the seven companies virtually, Singh stated the corporatisation of OFB was a major reform in the direction of making the country self-reliant in the defence sector.
“The erstwhile OFB, with its infrastructure and skilled manpower, was a strategic asset of the country, which made valuable contributions to national security,” he said.
However, Singh said there were concerns in the armed forces regarding high costs, inconsistent quality and delay in supply of products by the OFB in the last few decades.
“Being a government department, the OFB had little accountability to show profits. There were age-old procedures, practices, paper works and rules & regulations, which had lost relevance,” he said.
“Getting rid of these practices was the need of the hour and corporatisation was the best way forward. The government has been hand-holding these companies since the beginning,” Singh said.
The defence ministry said an amount of Rs 2,953 crore has been released to these companies in the form of equity during 2021-22 and 2022-23 for modernisation and a further amount of Rs 6,270 crore is planned to be released up to 2026-27 for capital expenditure.
In addition, an amount of Rs 3,750 crore has been released to these companies in the form of Emergency Authorisation Fund.
The functional and financial autonomy provided to these new corporate entities, coupled with hand-holding by the government, has started reflecting in their performance, the defence ministry said.
Within a short span of six months, from October 1, 2021 to March 31, 2022, these new companies have achieved the turnover of more than Rs 8,400 crore, it said.
The ministry said the new DPSUs have reported production achievement of more than Rs 6,500 crore in first six months of financial year 2022-23.
The ministry said the new entities have shown marked improvement in productivity and quality in the changed corporate set up. In 2021-22, out of seven companies, six have indicated profits based on the provisional financial statements.
To further improve the functioning of these DPSUs, Singh listed out some of the key areas which need to be focussed on.
Terming the present era as technology-driven, he exhorted the companies to develop or get acquainted with latest technologies, which are vital for the defence industry to make its mark at national and international levels.
He urged them to lay special emphasis on modernisation through domestic research and development as it is the “strongest and the safest way forward”.
The defence minister stressed on the need to increase India’s market share across the globe, describing it as the responsibility of the companies to contribute in the efforts towards achieving the objective.
He called upon the companies to devise and implement strategies with an aggressive and progressive attitude to make their presence felt in the current time of competitive bidding.
The defence minister said it should be the aim of the DPSUs to contribute towards increasing exports.
“Defence manufacturing is an important sector to achieve the goal of self-reliance. The Ministry of Defence has set a target of achieving a turnover of Rs 1.75 lakh crore in aerospace and defence goods and services by 2025, which includes exports of Rs 35,000 crore,” he said.
“The DPSUs must strive to achieve the goal and take the country to newer heights,” he added.
He said India is emerging as a global defence manufacturing hub.
“Today, as our country is moving fast towards becoming a 5 trillion dollar economy. Our defence exports have increased 5-6 times to Rs 13,000 crore as compared to the last 7-8 years,” he said.
“The new management must explore new opportunities abroad along with meeting the domestic needs,” he said. (PTI)