No question of weakening defence PSUs: Rajnath Singh

Tribune News Service

New Delhi, March 28

Defence Minister Rajnath Singh today informed the Rajya Sabha that there was no question of weakening of the state-owned companies operating in the defence sector, as over 80 per cent of procurement order goes to them and the government has been taking several steps to strengthen them with equity support and clearing liabilities.

Rs 4,725-cr FDI in defence in 21 yrs

MoD says defence sector saw Rs 4,725-crore FDI over the past 21 years, which is less than 1 per cent of the annual FDI in the country. Of that, Rs 3,343 crore came after 2014.

Replying to a supplementary question in the House, the Defence Minister said, “Our government is strengthening all DPSUs (Defence Public Sector Undertakings) with equity support. We are also clearing their committed liabilities so that our DPSUs do not weaken in any manner.”

Noting that high level of orders is being placed with them, Singh said, “As per my knowledge, about 80 per cent orders are given to DPSUs even today. There is no question of weakening the DPSUs.”

Noting that the defence sector is driven by high-end technology and innovation, Minister of State (MoS) for Defence Ajay Bhat said production orders were given to DPSUs too, even as FDI has been allowed in areas where the country does not have expertise and capacity.

“The government is taking steps to make the country self-reliant in the defence sector and with this in mind only the government has split the Ordnance Factory Board into seven new public sector units,” he said.

Bhat added that the country was benefitting from the opening of the defence sector to private firms. The FDI inflow in defence and aerospace, which stood at Rs 1,382 crore during 14 years from 2001, rose to Rs 3,343 crore in the ongoing seven years of the Modi government. Answering another supplementary query on lower investment after the FDI was opened in defence, the MoS said, “The government has made a list of 209 defence items to become self-reliant.”

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