SOURCE: ET
Hit initially by the lockdown, defence production has bounced back, with internal numbers showing a sharp recovery in the second quarter in which public sector units have doubled the value of production in all sectors—from shipbuilding to aviation and armament.
Data available with the defence ministry show that the value of production jumped to Rs 12,268 crore in the second quarter, compared to Rs 6,716 in the first quarter, spurring hope that public sector units are on the recovery path, given steady demand from the armed forces facing multiple threats.
Sources said that a review meeting was held by defence minister Rajnath Singh last month with all state-owned entities, which include Hindustan Aeronautics Ltd (HAL), Ordnance Factory Board and major shipbuilders, where the emphasis was on identifying bottlenecks to get back on track.
The performance of each entity was analysed, with special focus on trends and values of production orders, domestic procurement and outsourcing of work to private companies. “The idea was to identify problem areas and find solutions,” a source said.
Public sector units form a bulk of the domestic defence production even as the private sector is seeing a steady growth over the past few years. In the last financial year, over Rs 56,000 crore worth of work was done by PSUs while the private sector contributed 15,894 crore.
“We were hit initially for a month or two as workers were not able to come but managed to get back on our feet quickly. The problem however has been that the entire supply chain had been disrupted, slowing work. This has now been sorted and if the government places orders, we are ready to execute them,” a senior DPSU official said.
According to the internal data, OFB was among the hardest hit by the lockdown, with production dropping to Rs 650 crore in the first quarter from Rs 1,340 crore last year. Tasked with manufacturing a large chunk of ammunition and stores used by the armed forces, the OFB managed to get back on track in the second quarter, increasing production to Rs 1,643 crore.
HAL, which is the biggest defence PSU that makes helicopters and fighter jets, managed to keep production at steady levels even through the lockdown, dipping from Rs 3,107 crore in the first quarter last year to Rs 2,997 crore this year. However in the second quarter, the value of production has increased to Rs 4,432 crore.
Bharat Electronics Ltd (BEL), the second biggest defence PSU, saw numbers dip from Rs 2,116 crore to Rs 1,813 crore in the first quarter. In the second quarter, however, this has jumped to Rs 3,125 crore.
