There has been an impact on the Rafale production as well as on the training side. We expect the first batch to come by end of July, Bhadauria on Rafale delivery. We are targeting a bit of saving in the revenue side and re-prioritising capital spending as well, said RKS Bhadauria replying to a question on managing budget constraints

by Manu Pubby

The focus on Make in India and its big acquisition programmes will give a boost to indigenous industry in this hour of need, says Air Chief Marshal Rakesh Kumar Singh Bhadauria. He says even programs with foreign content, like the acquisition of 114 medium combat jets, will evolve to maximise technology transfer and localisation. Excerpts of an interview with Manu Pubby

On Defence Production Reforms And FDI Limit Increase:

Overall the steps will have a serious impact on our ability to energise Make in India. The aviation sector is capital and technology intensive and will get a lot of boost from the steps. The increase in FDI limit should be seen along with the fact that MSMEs are being supported. The 49% cap did not have the kind of impact desired but this (the new 74% limit) will create a big impact. The challenge, I see, is for DPSUs to integrate with the private sector. The whole of industry has to work together.

On Procurement Priorities:

The order for 83 TEJAS Mk-1A is a very big priority for us. It will naturally fit into the new regime and despite the issue of budgets, it is something we would want to go ahead with and, I am sure, it will get finalised soon. It will help HAL, the MSMEs as well as the private sector. Our focus is on this order for many reasons—the first 40 TEJASs on order are more or less through and we need to have the order for continuity. We need to take the TEJAS program to its max potential and for that we are already launching the Mk II program as well.

The other priority is the HTT 40 basic trainer that is close to getting finalised. This is an area in which we want work to quickly finish. It is a priority as we have closed the issue of procuring additional Pilatus trainer, so it is important that these aircraft come.

On Acquiring 114 Medium Combat Aircraft And Transport Planes:

The 114 project is work in process but there would be a substantial shift towards moving the entire manufacturing to India. This will be totally under Make in India and we need to address issues so that an entire transfer of technology takes places. The manufacturing capacity of this class of aircraft has to be brought into our industry. Capability wise, this is a very important project for the air force. We will follow it up after the TEJAS order.

The contours of the program will change and align with current directions and the need of the hour.

The C-295 (transport plane program with TATA-Airbus) is at the final stages. It is under process in the acquisition wing of the ministry of defence. In the transport stream, it is again an important Make in India project and from the industry perspective, it will bring in manufacturing capability in this segment.

On Managing Budget Constraints:

We are targeting a bit of saving in the revenue side and re-prioritising capital spending as well. This year, a lot of training (and foreign exercises) have been put off and that will help save something.

We will also have to stagger procurement projects and we want to help and support the indigenous industry in this hour of need. The challenge is to find new ways of tackling budget concerns and the industry also needs to find innovative solutions. If upfront advances and milestone payments can be reduced, it is as good as staggering payments for later years.

On Rafale Delivery And Other Fighter Purchases:

There has been an impact on the Rafale production as well as on the training side. We expect the first batch to come by end of July and in terms of production, there would be some impact but as we go along, it will get mitigated.

The Su-30MKI upgrade program is also being processed as HAL will soon be out of work at its production facilities. Along with that, the MiG 29 project (purchase of 21 aircraft from Russia) is also on.