Defence industry reforms here to stay

NEW DELHI: The CPM-backed Citu has more than one reason to be miffed with the Union defence ministry. Besides rejecting the Left’s demand against shortlisting 12 private entities as Raksha Udyog Ratnas (RURs), it has addressed a letter to politburo member and MP Chittabrata Majumdar, who passed away more than three months ago.

The letter sent by defence minister A K Antony on May 30, in response to Majumdar’s plea in January not to implement the Kelkar Committee recommendations on introduction of RURs till a discussion is held with the stakeholders, made it clear that the government would go ahead with introduction of 26% FDI as foreign partners in technology collaboration were a “vital” part of defence industry reforms. Mr Antony said the attempt was to benefit the country’s defence industry sector by infusion of competition into the procurement environment and broaden the industry base to achieve self-reliance.

The argument, just a week ahead of the presentation of the committee’s report to the defence minister, and that too to in a communication to its leader, who passed away on February 20, has not in the least pleased comrades. Citu leader and CPM’s Rajya Sabha MP Tapan Sen shot back a letter on Saturday to the defence minister reiterating the demand against shortlisting of RURs. “It is surprising that the government is still insisting on providing financial assistance to the private entities with RUR stamp for their development projects which tantamount to subsidising them to compete with the public sector entities,” he said.

Mr Antony, in his letter said financial assistance to Indian industries for development projects would be provided by the government strictly in accordance with the established procedures and that the concept of “shared development cost” in “make” category projects has been introduced as a measure of hand-holding of the industry and long-term commitment to promote R & D in defence.

However, Mr Sen said that all central trade unions, employees unions and federations have strong reservations about RURs. “I am afraid ministry officials are perhaps not updating you not only on the demise of a veteran trade union leader and MP but also on the strong opposition to RURs among the employees of defence production and allied organisations under your control,” Mr Sen said.