Lok Sabha Question No. 4273 (UNSTARRED), answered on 2017-08-11
Subject: Ordnance Factories and Defence PSUs
Ministry: DEFENCE
Asked by: M. K. RAGHAVAN

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE

## DEPARTMENT OF DEFENCE PRODUCTION

## LOK  SABHA UNSTARRED QUESTION NO.4273

TO BE ANSWERED ON THE 11 TH  AUGUST, 2017

## ORDNANCE FACTORIES AND DEFENCE PSUs

4273.  SHRI  M.K. RAGHAVAN::

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the total Ordnance Factories (OFs), Public Sector Units (PSUs) and research and development establishments under his Ministry;
- (b) the indigenous equipment and machineries produced by these establishments and the  total  foreign  exchange  saved  from  their  production  in  the  last  five  years  and  the current year;
- (c) the reasons for the lacklustre production from these establishments needing heavy import in the defence sector;
- (d) whether there is a move to encourage private players in defence production rather than enhancing Ordnance Factories (OFs) and if so, the details thereof; and
- (e) the  measures  taken  to  ensure  these  OFs,  PSUs  and  Research  Centres  are  fully equipped to meet our demand?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

र  ा रा य मं ी

(DR. SUBHASH BHAMRE)

(डा. सुभाष भामरे)

- (a) 9  Defence  Public  Sector  Undertaking  (DPSU)  with  47  units  &Ordnance Factories  with  41  units  and  Defence  Research  and  Development  organisation (DRDO) with 54 research and development establishments are there under this Ministry.
- (b) Indigenous design, development and manufacturing of Defence Equipment is an ongoing process to achieve self-reliance in Defence. The above organizations  in  the  past  have  designed,  developed  and  manufactured  several major  defence  equipment  indigenously.  These  inter-alia  include  Light  Combat Aircraft  (LCA),  Akash  Surface  to  Air  Missile  System,  Advance  Light  Helicopter (ALH), Weapon  Locating  Radar,  Central  Acquisition Radar, Pinaka  Rocket System, Warships and Offshore Patrol Vessels etc.

The exact estimate of the savings in foreign exchange in this process is not feasible as it involves intangibles and opportunity costs.

(c) The  Value  of  Production  (VoP)  in  respect  of  these  establishments  is increasing  continuously.  A table  indicating  VoP figures  for  the  last  three  years given below:

(Rs. in crore)

| Value of Production   | Value of Production   | Value of Production   |
|-----------------------|-----------------------|-----------------------|
| 2014-15               | 2015-16               | 2016-17               |
| 46391                 | 52968                 | 56014                 |

(d) Defence  Industry  sector  was  opened  up  for  private  sector  participation including Foreign Direct Investment (FDI) in 2001. Since then DIPP has issued 342 industrial  licenses  to  205  Indian  private  companies  for  manufacturing  various types of defence items. Out of these, 66 companies covering 109 licences have reported commencement of production.

(e) DPSUs and OFs are continuously modernized to meet the demand of the services  in  terms  of  capability  and  capacities  and  have  taken  several  steps  to achieve self-reliance which includes in-house R&D programme, creation of new facilities/Joint ventures etc.

In  so  far  as  DRDO  is  concerned  it  is  only  involved  in  the  prototype development and subsequent production is through OFBs and DPSUs. DRDO has been  involving  users  and  private  industries  right  from  the  inception  of  many projects.

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