The Rafale controversy has put the spotlight on the financial crisis at Hindustan Aeronautics Ltd.
DELAYED PAYMENTS from the Indian Air Force has landed the once debt-free Hindustan Aeronautics Ltd in a spot. By the end of this year, HAL’s dues will balloon to 20,000 crore, crippling its ability to carry out day-to-day operations. Its financial woes have given ammunition to the opposition, which had been targeting the Narendra Modi government for having bypassed the public-sector company to award offsets related to the Rafale deal to Anil Ambani’s Reliance.
“The financial situation at HAL would have been different if the Rafale offsets were given to it. It is a huge contract,” T. Suvarna Raju, former chairman and managing director of HAL, told THE WEEK. Insiders say HAL, which has paid 5,000 crore to the defence ministry in dividends in the past four years, had to borrow around 1,000 crore recently to pay salaries to its 30,000 employees.
The crisis at HAL has intensified the war of words between Defence Minister Nirmala Sitharaman and Congress president Rahul Gandhi. Rahul alleged in Parliament that the government had favoured Reliance at HAL’s expense. Sitharaman retorted that the government had given HAL contracts worth 1 lakh crore, and that the Congress was weeping crocodile tears.
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