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Pricing Of Equipment Provided By Defence PSUs

Issue: 07-2018

It has been reported that the Ministry of Defence has set up a committee to audit the high cost of Tejas Mark 1A quoted by Hindustan Aeronautics Limited (HAL). In April 2018, HAL quoted 463 crore per jet for a total of 83 aircraft. Compared to this, HAL supplies the Russian Sukhoi fighter, which it assembles at Nashik, at 415 crore whereas ex-Russia it costs 330 crore. The Swedish Gripen was offered to India for 455 crore and the F-16 for 380 crore. Both these aircraft were to be made in India if selected. The Tejas Mark1 was supplied by HAL for less than 100 crore. The Government has been keen to promote aircraft manufacture under ‘Make in India’ scheme, but the high cost has alarmed the authorities. The committee will also look into the pricing of military equipment manufactured by defence PSUs and is headed by Principal Advisor (Cost).