The Hindu : Karnataka News : Defence staff oppose privatisation move

Online edition of India's National Newspaper
Friday, Nov 30, 2007
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Karnataka

Karnataka

Defence staff oppose privatisation move

M. Raghuram

Panel formed to draft guidelines based on Kelkar Report

BANGALORE: The All India Defence Employees Federation (AIDEF) is bracing up for an all-out effort to pressure the Government to keep out the private sector from Defence hardware production.

Federation general secretary C. Srikumar told The Hindu that the concern of the Defence employees has been conveyed to Defence Minister A.K. Antony. The federation had appealed to Mr. Antony to shelve the recommendations of the Kelkar Committee.

He said following the Kelkar Committee report, the Government had constituted a “selection committee” to lay down the guidelines for inviting private enterprises to enter the ordnance sector.

According to the guidelines, any company with a turnover of Rs. 1,000 crore for three years in a row could qualify for manufacture in the ordnance industry. The federation opposed the Defence Procurement Policy 2006 which had provisions that could enable the private enterprises to participate in various stages of production as well as procurement of vital equipment for the armed forces.

Captive units

Mr. Srikumar said the Defence industries owned by the Union Government were captive industries and were not meant for making profit. With disregard to this special status, the National Democratic Alliance Government had arbitrarily changed the industrial policy and had taken a decision to allow private participation in Defence production with 26 per cent Foreign Direct Investment.

This would open up all the eight defence public sector undertakings, 24 ordnance factories, 51 Defence Research and Development Organisation laboratories and other Army, Navy and Air Force workshops to the private sector. It was the first time that the Government was thinking of such a move and this had to be resisted as foreign companies could enter the sector through collaborations, he said.

The federation, in its appeal to the Government, has opposed granting 12 private companies the status of Raksha Udyog Ratna. It pointed out that the Government ordnance factories were producing world-class armaments which had brought down the level of imports. Perhaps, if the ordnance factories were given additional funding, they could perform better.

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