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Okabe Rintarou

Okabe Rintarou

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Tridev123 said:
Agree to a large extent. The Indian private sector is still treated with suspicion by the bureaucracy. According to them as regards the defence sector
- Govt/PSU people are good and patriotic Indians
- Private sector people are of doubtful loyalty and bad Indians
This is putting it in very simple terms

But the unrefutable reality is that Indian defence production can never reach Self Sufficiency without involving the Private Sector in a big way. We don't have endless financial and material resources like the erstwhile Soviet Union to keep on pouring money into the Public Sector until they achieve success.

So productive and efficient usage of resources is essential to maximise return on investment. The Private Sector because of its profit motive will seek to minimise costs and maximise output. Labour productivity is also generally more in the Private Sector.

This does not mean that the Government and the Public Sector are unnecessary.
The Armed Forces of nations are themselves an Government organisation and are entrusted with the security of the nation. Many strategic sectors like Atomic Energy, Space etc are mostly in the Public Sector. The Government invests money and resources in these activities for the larger national interest. Health Care is another important area where the Government is necessarily present in order to provide good health care services to the public at reasonable cost.

The Government and the Public Sector will continue to exist but a balance has to be maintained. Wherever the Private Sector can make a meaningful contribution it should be allowed to operate. If the Private Sector can produce better quality defence products and innovate better then they should be provided a level playing field.

As far as ship building is concerned a company like L & T should be encouraged to contribute more to national defence. Established PSU's like Mazagon Docks Limited should initially hand hold such efficient companies like L&T and share the expertise. Probably by sub contracting and giving work share to them. No harm in involving them in large projects like destroyers, frigates, submarines or even aircraft carriers.
Once they gain the expertise and confidence they can bid independently for mega naval programmes.

By building up the Indian Private Sector capability nobody will lose and the Nation gains. It should not be seen as Public vs Private. The requirements are so large that both can thrive. If we want to keep pace with the Chinese naval shipbuilding speed then it is essential that the Indian Public and Private shipbuilders act in unison.

If tomorrow L&T becomes an Indian Hyundai in shipbuilding it does not mean that MDL will close down and its workers thrown into the streets. Both will succeed.

It is simply beyond logic that we are willing to trust and buy defence products from other countries in large quantities but don't want to empower our own Indian owned and Indian staffed Private Sector companies to try to meet our defence requirements.

To be honest, winds of change can be seen but more needs to be done and quickly to increase our overall national defence production capability. Indian defence startups are already making good progress in niche areas.
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Private participation is surely required, but lets not go overboard with it. You give the private sector too much piece of the pie and they will simply form "JV" to peddle foreign wares in India under "Strategic Partnership" which is the new euphemism for ToT. Private companies need to show that they are willing to do in-house R&D and have an avid interest in ensuring Indian ownership of the intellectual property rather than just doing screwdrivergiri for foreign firms and taking a cut of the profits.
 
T

Tridev123

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Okabe Rintarou said:
Private participation is surely required, but lets not go overboard with it. You give the private sector too much piece of the pie and they will simply form "JV" to peddle foreign wares in India under "Strategic Partnership" which is the new euphemism for ToT. Private companies need to show that they are willing to do in-house R&D and have an avid interest in ensuring Indian ownership of the intellectual property rather than just doing screwdrivergiri for foreign firms and taking a cut of the profits.
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There should be checks and balances. Nobody will be allowed to take the Indian Government and the public for a ride. I would think we have sufficiently experienced people in the Government who will ensure that the legal framework promotes true indigenisation and innovation and not fake screwdrivery.

There will be rotten apples in the private sector also but they will not be able to exist for a long time. Forming joint ventures with foreign OEM's is not bad per se , if the Indian partner has a road map for progressive indigenisation of the product over a period of time.

What is the alternative?. Open more OFB factories because the private sector may cheat the Government.
 
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