Chief of Air Staff Air Chief Marshal BS Dhanoa has taken a dig at Hindustan Aeronautics Limited (HAL) for not delivering defence equipment on time. HAL, the legacy of Nehruvian Socialism and the blue-eyed boy of Congress party is one of the most inefficient defence manufacturers in the world. The company regularly shifted the delivery timing of equipment to the Indian Air Force (IAF). “IAF has not shifted any goal posts as alleged. The development has taken such an incredibly long time that armament and technology has gone obsolete… I as the service chief can make concessions to Hindustan Aeronautics Limited (HAL). Will the enemy make concessions to me when I go and meet the enemy?” said Dhanoa at a lecture organized by Centre for Air Power Studies. “In combat, there is no silver medal. Either you win or you lose,” added the Indian Air Force chief.
HAL is among the monuments of Nehruvian economy and a testament to its abject failure. The company was established in Bangalore on 23rd December 1940 by Walchand Hirachand to promote defense manufacturing in the country. However, the British government soon forcefully took over the company and nationalized it. Later when India became independent, the nationalized company was brought under the Ministry of Defence. In later days, HAL was established as the main defence manufacturer of the country and a significant amount of resources were put into it. However, HAL could not get any major breakthrough in seven decades of its existence and country continued to import defence equipment from private manufacturers in countries like the United States, France, and the United Kingdom. All HAL has been able to achieve is to manufacture less skill intensive and tech intensive equipment for Indian aviation sector by technology transfer from the Soviet Union.
Indian Air Force chief Dhanoa also said the HAL has delayed the upgradation of one squadron of Miragae-2000 jets, two squadrons of Su-30MKI and one squadron Jaguars. The company has also delayed the production of Su-30 by more than two years and production of Light Combat Aircraft by more than six years. “To make up for losses HAL has to play a key role to step up manufacture and overhaul,” said Dhanoa. Emergency purchase of fighter aircrafts needs to be made from foreign defense manufacturers due to the inefficiency of HAL.
India has to import fighter aircrafts like Rafale for the Indian Air Force because the Hindustan Aeronautics Limited failed to build good fourth and fifth generation aircrafts. Five largest defence contractors in the world, Lockheed Martin, The Boeing Company, BAE Systems plc, The Raytheon Company, Northrop Grumman Corporation are private sector companies. In fact, among the top 25 defence contractors (in which HAL does not get a place), none is a public company. HAL is stuck in the inventories, its revenue in the previous five fiscal years increased by just 4.3% per annum on average. Profits decelerated from 2,997 crore rupees in FY13 to 2,070 crore rupees in FY18. Execution is slowest at HAL among its global peers. “After ~12 years of awarding, HAL is still executing its first order of 20 aircraft (Tejas light combat aircraft). Work on the second order of 20 aircraft has not started for more than seven years, as final operational clearance is awaited,” said a defence analyst at IndiaNivesh.
The incompetence of defence manufacturing is not limited to Hindustan Aeronautics Limited only. Other public sector defence manufacturers like Defence Research and Development Organization (DRDO) and Indian Ordnance Factories are equally incompetent. These companies could not produce a single arm of global competence despite decades of existence and having consumed billions of dollars of public money.