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Defence industry may see spectacular growth after 2019 General Elections, says L&T’s Jayant Patil

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May 16, 2018 12:28 PM IST | Source: Moneycontrol.com

The L&T Whole-Time Director expects capital spending, as part of the defence budget, to increase next year, resulting in higher project orders

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Jayant D Patil spearheaded L&T’s foray into the defence industry in 1986, at a time few other private companies saw any promise in the heavily regulated industry. Patil, who joined the infrastructure heavy weight straight after passing out from IIT Mumbai in 1978, developed long-term relationships with the DRDO, and the Navy, among other defence establishments.

The early start is now helping the engineering giant. In 13 years since its debut in the market, L&T has become the largest private defence company in the country, and is bigger than most of the government-owned defence enterprises.

In an exclusive interview with Moneycontrol, Patil – Member of the Board & Whole-Time Director (Defence Business) at L&T – says that defence is one of the fastest growing businesses in the company. To reflect the growing importance of the vertical, the defence business is now an ‘independent company.’ And starting from this financial year, L&T will report the defence segment as a separate entity within its core businesses.

“We have the entire infrastructure in place. We have all the initiatives put in place. We have the R&D centres,” says Patil, adding that L&T is set for a spectacular growth.
For that growth to happen though, the central government will have to increase the proportion of capital spending in the defence budget. Patil is hopeful of that happening after the 2019 General Elections.

Excerpts from an interview:

The government has talked about developing capabilities domesticallyto reduce the dependence on imports. The Make in India campaign also focuses on the defence industry. Have you started seeing the difference?

The focus is there. The government has started putting programs in a competitive basket. Earlier projects would either go to a foreign player, or to a PSU. But now, for instance look at Navy. Earlier, 92 per cent of the warships or submarine contracts by value have been placed with government owned shipyards. As of now, except of old decisions, the government plans to allow private sector to participate in all future shipbuilding programs on competitive basis.

The issue is that things are not changing at the kind of pace what one would have hoped for and the quantum of money being allocated to enable new contracts. The current Budget allocations are just good enough to meet committed liabilities.

Why is that?
One should look at the budget allocation. Till 2014-15, 40 per cent of the defence budget would go into capital spending. Today, that has dropped to 20-25 per cent. And that it because of the huge increase in revenue costs (salary and pension payments).

That is something which the government did out of sheer respect for people who fought for the country. But the fact is that it has come at a huge cost for the future preparedness of Armed Forces. So money has become a constraint and allocations need to be enhanced.

And that has led to the slow pace?
Yes.

Do you think the situation will be better after the General Elections in 2019?
Yes, I believe that the reversal will possibly happen when the new Government comes around after the 2019 General Elections.

What has the present situation meant for L&T’s defence business?
So we have a scenario today where this is a market which shows huge promise. And we keep getting orders as and when a PSU gets a big contract. The public enterprises buy from us because we have developed these products in partnership with Defence Research Organisation (DRDO). So the business continues in “business as usual” state, the growth comes in with us getting few contracts directly from MoD.

But the growth could have been truly spectacular had Make-in-India programs taken off in a big way. We have the entire infrastructure, technologies, products and capabilities already in place. We have all the initiatives proactively in place. We have the R&D centers, design centers, and innovation groups in place. Earlier we used to have one, but now we have four R&D / Basic Design Centers to serve the defence sector.

What is your manufacturing presence?
Today we operate from Powai (Mumbai), Hazira, Baroda, Pune, Coimbatore, Vishakapatnam, Katupalli, New Mumbai and Bengaluru, which is more of an R&D unit, but also has a small production facility for strategic electronics.

Which is your largest segment?
The largest segment today is the artillery and Naval segments. The smallest segment what we are operating today is the space, missiles, communication, which are individually worth about Rs 100-200 crore per year.

What is the total order book now?
I can’t give you that number. But perhaps in another few months I can. From the 2019 financial year, we will be reporting defence business as a separate entity within the L&T core business. So wait for that.

Although we have been operating defence business for three decades, we had created defence as a separate independent company (IC) as an entity, with its own board, in the FY 2018.

A few reports last year said your order book was of about Rs 12-15k crore…Holistic if we look at it, we are bigger than that.

So all the defence businesses will be brought under this IC?
All the defence offerings are under this IC, except for very strategic construction programs.

Could you give an idea of how big your defence business is?
If I look at comparisons, HAL and BEL (Hindustan Aeronautics, which has revenue of about Rs 17,000 crore & Bharat Electronics, which has a revenue of about 10,000 crore, respectively) are larger than us. But we are slightly bigger than the other PSUs. You should remember, we were never allowed to produce until licensing began in 2002 and began getting direct orders from MoD only in 2005. In 2002, we got the first license. It’s just been 16 years now.

L&T forayed into defence even before that, with partnerships with DRDO and other defence establishments. How has the early start worked for you?

Across the segments, we have built capabilities that are unmatched. Be it warships, submarines or weapon systems, today our portfolio and offerings are ahead of competition. No other company has a portfolio range and depth as that of L&T. We don’t produce weapons as yet. But we make weapon launching systems and fire controls across the range. We can offer complete solution for an anti-submarine warfare, air-defence, land attack, or anti-ship warfare role to a warship. So, there is no domain in weapon programmes which L&T doesn’t touch.

And because we have in-house capability, we have forged partnerships where we also bring in unique value. As a result, L&T has 250 MoUs and just 4 joint ventures (equity based) while we have preferred to engage in non-equity JVs / partnerships through joint development and joint production mode. ​

Would you consider hiving off the defence business as a separate entity?

No, it is and will stay as a part of core of Larsen & Toubro.

But would you eventually list the business?
I don’t see that, not at least for the next decade or two. As for now, we are better off being part of the L&T core.

Is the defence biz growing faster than the other parts in the L&T core?

Percentage growth wise, I would say it’s among the better growing ones. But the fact is that the scale today is smaller than many other construction & hydrocarbon businesses. So if I look at the entire portfolio of L&T, defence, smart world, power transmission and water are businesses growing faster than others in percentage terms.
First Published on May 16, 2018 12:22 pm

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DRDO’s evil eye warder

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It’s amazing how technological advancements in India go side by side with the ancient believes that after thousands of years haven’t changed a bit. Just look at the photo – this concoction of green chilies and lime is an evil eye warder, generally known as “nazar battu” or “nimbu-mirchi totka”.

DRDL is DRDO’s missile lab, see the following

Now DRDO will deliver all products with evil eye warder, generally known as “nazar battu” or “nimbu-mirchi totka”.

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Top DRDO Scientist Accused of Sexual Harassment – The New Indian Express

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Author: Pradip R Sagar

Published Date: Mar 8, 2015 6:00 AM

Last Updated: Mar 8, 2015 5:10 AM

A 25­ years­ old Junior Research Fellow has filed a complaint against D Majumdar, additional director of DIPAS, of making sexual advances.

NEW DELHI: After well­ known environmental scientist Dr R K Pachauri faces allegations of sexual harassment by his junior woman colleague, a senior scientist of the Defence Research and Development Organisation (DRDO),the country’s premier defence research body, too is facing similar charges by a junior researcher.

A 25 ­year ­old Junior Research Fellow has accused 59­ year­ old Dr D Majumdar, the additional director of the DRDO’s Delhi ­based Defence Institute of Physiology and Allied Sciences (DIPAS), of sexually harassing her. Taking cognizance of the woman’s complaint, Majumdar has been shunted out in ‘public interest’ following the recommendations of a high ­level committee, which was set up by the DRDO, to look into the allegations

According to official sources, the woman, who joined DIPAS in December last year, filed a complaint with the head of the organisation in February. In her complaint to Dr Shashi Bala Singh, Director, DIPAS, the woman accused Majumdar of making sexual advances towards her and she also sought her transfer from the particular group of Ergonomics. The woman alleged that Majumdar used to sexually harass her on his office premises. Over 40 other fellow researchers also came in support of the woman complainant and gave their representation against Majumdar. Subsequently her complaint was forwarded to the DRDO headquarters and a five­ member committee headed by Hina Gokhale, Director HRD of the DRDO, was formed to look into the allegations, as per the Vishakha Guidelines formulated by the Supreme Court.

Majumdar, who is retiring by the end of 2015, has been transferred to a Gwalior ­based laboratory where he has been directed to report by March 16. When contacted, Majumdar defended himself and said that the allegation was a conspiracy. “I completely denied such allegations and it is a conspiracy to defame me. Surprisingly, hours after appearing before the committee on March 3, I received my transfer orders from the headquarters,” said Majumdar, Scientist G of the DRDO, which is equivalent to a Joint Secretary ­rank officer. While deposing before the committee, he reportedly handed over six testimonials from junior scientists in his favour.

However, the complainant didn’t comment. When contacted, Dr. Shashi Bala Singh said, “I will not be able to make any comment on it. Please contact my headquarters.”

But DRDO Spokesperson Ravi Gupta said, “We (DRDO) follows strict regulations, whenever such allegations come out in the department. Since in this matter, a committee is already constituted and looking into the matter, it would be inappropriate for me to comment on its proceedings.”

Experiment with Controversies DIPAS was recently in the news for carrying out a study for faster deployment of troops for high ­altitude operations in case of war ­like situation, which was rubbished by the Indian Army. In fact, army severely criticised the methods adopted by the DIPAS scientists to collect data sample for its study. DIPAS was set up after the Indo ­China war in 1962 with the thrust area identification of high altitude physiology, nutrition and biochemistry of human in and also with the urgent need felt for ergonomic assessment of workstations and machine interface. The laboratory carries out various researches and studies to look into the aspect of high altitude warfare.

 

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Narendra Modi’s dream project ‘Swach Bharat’ and DRDO

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स्वच्छ    भारत – स्वच्छ   डी आर डी ओ – स्वच्छ डी एम एस आर डी ई

Dear Sh Avinash Chander Ji

You’re beloved Dr A K Saxena’s  concern about स्वच्छडी एमएसआरडीई,

Please look following photo feature of cleanliness of DMSRDE toilets. Dr A K Saxena has no time to look in to the hygienic condition of DMSRDE campus. The staff responsible for cleanliness engaged for personal service of his aides.

This is not the only case, same state is in DEAL also Sh R C Agarwal has no time to see these affairs because he use to out of station on TD for more than 90% time. In DEAL the officials even lodge written complaint of broken door of toilets but no response….

Hope you can send directive to your beloved aides to look in to the hygienic conditions of lab since you have   11960 crores of budget.

 

Regards
www.corruptionindro.com  

DMSRDE Toilets
DMSRDE Toilets conditions
DMSRDE Toilets2
DMSRDE Toilets conditions
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The 38th DRDO Directors’ conference (25th -26th March 2014) – Hidden Agenda

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Over time now the shape of DRDO Directors’ conference has become more like a dealer’s meet.  Day after day mismanagement, corruption, incompetency and lack of responsibility are increasing in DRDO.

The superfluously  increasing number of court cases are giving red signal to top DRDO brass, but they are following great lines, Don’t See (corruption/ manipulations/ hatred toward SC community or weaker section/ Nepotism ), Don’t Hear (feed backs/grievances),  Don’t speak (Good words)

The concept of participating in conferences with wives and thereby waste huge amount of poor taxpayers’ money in the name of corporate management meet.

Hope in 40th DRDO Directors’ conference directors will attend conference with their sons and daughters, son in laws, daughter in law or with ………. Because the aim and total object is exploit the funds. No common Indian can imagine the expenditure of Nehru Park morning walk.

Starting from morning walk dressed with DRDO track suits with the aim of reviviscence / reincarnation but they look like under heavy encumbrance and look towards each other for race of H to DS, for Director to DG, extension, extension to contract, or finally post in any deemed university because the great institutions are not going to entertain such scraps.

The end of each and every corporate meet always shows productive results but in the DRDO Directors’ conference the directors learn  good manipulation techniques to wring the suppliers from  their extra ordinary expert colleagues, how to put their wards/ kith & kins in DRDO (already 10 top ex  brass are under CBI lens),  how to rafa dafa complaints (LTC 80 is one), how to use flying mileage points in personal use, how to manage PhD’s from deemed university by distributing funds from CARS or project funds, how to manage foreign tours by forge/ false inventions from foreign universities, best ways of plagiarism, how to manage one or two rebellions (common figure in DRDO now  the figure is increasing in few labs like DMSRDE, DRDE may be some short of chemical reaction), how to get fast VRS if some audit objections start targeting, how to manage fake degrees cases as DOP already sent a letter in this regard No DOP/01/03500/Lumpsum/M/01 dated 11th March 2011.

So beware all DRDO officers /staff only honest ones (not Chamchas) after two days all directors will return from 38th DRDO conference with sharpened skills………etc.

Happy conferencing …………..

Drdo

DRDO should focus on areas where it has capacity to deliver: Manmohan

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DRDO should focus on areas where it has capacity to deliver: Manmohan
TNN Aug 1, 2012, 02.00AM IST

NEW DELHI: With India still importing well over 60% of its military hardware and software, Prime Minister Manmohan Singh on Tuesday asked DRDO to concentrate on key strategic and military technology areas to ensure weapon systems are developed without huge time and cost overruns.

In the backdrop of crucial projects like the Tejas light combat aircraft running way behind schedule, the PM said, “The share of the indigenous content in defence procurement continues to be low. We need to take a hard look at the pipeline of our projects and focus our time and material resources on selected areas where we have demonstrated capacity to deliver projects within reasonable time and cost.”
Holding there was “a net deterioration in international strategic and security environment”, “political uncertainties in our neighbourhood”, turmoil in West Asia and ever-growing terrorism and cyber threats, the PM said the armed forces would be provided the “wherewithal” to secure “our frontiers”.

This will, in the long term, help India to build a robust domestic defence industrial base, in both the public and private sectors, to compete with global players in developing state-of-the-art technologies.

“We need to give the industry a boost and quicken the pace of development. The role of DRDO is this is truly critical, given that there are 800 enterprises supporting its projects and programmes,” he said.

Readers’ opinions (15)

sd (delhi) 27 days ago
first of all manmohan singh should look for indian industry which is shutting down day by day . indian industries keep on labeling chinese products due to low pricing in china & poor facilities given to industrialist like electricity etc. number of forms are there to fill at the time of dispatches, waste of time & paper. they should implement gst to get rid of various taxes

ADM (Bangalore)3 Followers 27 days ago Silver: 1463323
DRDO is a public sector failure and MMS is a public elect failure……

Baba (Delhi) 27 days ago
Bio-toilets of DRDO is only required for using in extreme cold areas where temperature is sub-zero and some what beneficial in trains…… but in plains in normal temperatures in villages it works just like any normal toilet with under ground septic tank… only difference is they use more costly metal septic tank …. and even they add some bacteria in to the tanks…. it is essential as faecal matter degradation occurs naturally…….. It is only helpful earning of crores of rupies for DRDO ToT holders and gain some media hype for DRDO people by fooling the rural development minister. with the cost of one so called Bio-toilet 4 toilets can me constructed in villages that too with using local available resources and emplying local unemplyed people. Using fasionable words”Bio-Toilets” they r fooling common man of the country… and the ministers as well…….

Pram (Mumbai) 28 days ago
In which area MMS has capacity to deliver?

Sopan Thengadi (Riyadh, Saudi Arabia) 5 Followers 28 days ago Silver: 3566434
The ‘delivery capacity’ of DRDO and other PSUs are well known. Tejas, Mig 21, LCH projecet, MBT Arjun, Air India – the list of underperformers is unending !!!
sinha.asok (Patna) 57 Followers 28 days ago Gold: 5587432
In a country all limelight is hogged by the politicians and bureaucrats and scientists are not even recognised for their contributions, it is too much to expect much from them. MMS should, first of all, start delivering on the social and economic fronts to prepare a conducive environment to face deteriorating security situation on the international stage.

pk (delhi) 28 days ago
Manmohan singh better focus on some economic strategies for country, rather than blaming DRDO

pr (bengaluru) 28 days ago
Once upon a time a cat mewed and dozed off again when the entire country plunged into darkness

Sudhir (IND) 57 Followers 28 days ago Gold: 10.5K542
Manmohan Singh is the most corrupt PM, Hindustan as ever seen. He as given Secular Congress members licences to loot the public.

hihari (Canada) 21 Followers 28 days ago Silver: 4534432
Sach bola MMS. DRDO has been putting its foot everywhere to have budget worth billions of dollars, but has delivered not even 50% of major projects! MMS bolts sach hai par karta kuch nahi hai, kya Karen iska!

Kartun Mhd with bomb (Kangress hate camp) 28 days ago Gold: 5022441
Manmohan should relax, because he does not have capacity to focus anywhere, except on Sonia’s instructions.

Air Cmde Raghubir Singh(Retd) (Pune) 28 days ago
Yes of course ideally DRDO should be concentrating on key military technologies to deliver without time & cost over runs-but how? If we have lagged behind in Tejas, option is not to get out of the aircraft development & concentrate on say making guns –we have to catch up with aviation technology too. Developing appropriate technologies should be national mission. For example we have been manufacturing MiG’s in our Hindustan Aeronautics for the last 50 years or so. Has the joint program between Russia & India lead us to any worthwhile aviation technology which could have been useful in our LCA or was it merely CKD’s riveted and nut-bolted in our complexes here –the Tatra way all the time? MoD must take a hard look of technology content in such joint ventures & also cost of locally assembled aircraft being comparable to the fly away imports. Now that DRDO has achieved breakthrough and much needed successes in quick successions in missiles & other areas, it must continue the dream run by change of leadership in labs which have been lagging behind. It may even think of getting service officers on deputation to man critical programs

Suraj Vanch (Wlltn) 28 days ago
the poodle barks

Dom pereira (Florida) 28 days ago
until and unless India allows the private sector to take part in defense manufacture in a big way India will never be able to be self sufficient in defense production. Private companies have the capacity to follow strict time frame which is very crucial to bring the cost down. In the U.S private firms run most defense companies and the results are for all to see.

dasg (ny) 28 days ago
PM Singh also ask this question to himself, has he capacity to deliver on much needed economic reforms on coal, power, labour and much else. It is easy to point to failures by others. He has failed miserably and hapless public is paying a heavy price for his incompetence in building consensus and pushing through much need economic reforms

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Sanctioned in ’83, LCA Tejas is yet to take off

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Sanctioned in ’83, LCA Tejas is yet to take off

Rajat Pandit, TNN Feb 12, 2008, 01.55am IST

NEW DELHI: When defence minister A K Antony witnesses a flight demonstration of the Tejas Light Combat Aircraft (LCA) in Bangalore on Tuesday, he should take a close look at the fighter which typifies all that is wrong with defence projects in India.

The LCA project was sanctioned way back in 1983 at a cost of Rs 560 crore to replace the rapidly aging MiG fighters.

A quarter of a century later, with project costs already pegged at Rs 5,489.78 crore, the LCA is still at least four years away from becoming fully operational.

And when IAF finally inducts an LCA squadron, around 2012 or so, it will fly with American GE-404 engines and radars developed with Israel’s help, apart from several other ‘foreign’ parts in what is touted to be an ‘indigenous’ project.

Yes, developing a supersonic fly-by-wire fighter jet from scratch, with international sanctions in place for several years, is an extremely complex task. “But taking almost three decades is criminal,” said a senior official.

“All the agencies involved in it like the Aeronautical Development Agency, Defence Research and Development Organization, Hindustan Aeronautics Ltd and even the IAF, which has frequently changed requirements of weapons and electronic warfare midway, have to share the blame,” he added.

For the record, the two LCA technology demonstrators and three prototype vehicles have clocked over 800 flights till now, accumulating 425 hours and covering a flight envelope of 1.4 Mach and 15-km altitude.

Last year, the LCA even test-fired its first air-to-air missile, prompting the defence ministry to proclaim it as “a historic event” marking the beginning of the “weaponization” of Tejas. But the fact remains that the deadlines for the IOC (initial operational clearance) and FOC (final operational clearance) of Tejas have been revised time and again. As things stand now, IOC is projected by 2010 and FOC by 2012.

IAF, on its part, has ordered only 20 LCAs so far, despite pressure from the defence R&D establishment, unsure as it is of the delivery date and whether the LCA will be a top-notch fighter once it is ready. Incidentally, IAF and Navy had earlier projected a requirement of as many as 220 LCAs.

The less said about the indigenous Kaveri engine, which was meant to power the LCA, the better. The repeated failures of Kaveri – its development cost has jumped to Rs 2,839 crore from the initial Rs 382 crore – has meant the first 40 LCAs will have the American GE-404 engines.

With no solution in sight, DRDO has invited proposals for foreign collaboration for the co-development of Kaveri now. Keeping all this in mind, the overall development cost of LCA will zoom well over Rs 12,000 crore before it becomes a reality.

 

Readers’ opinions (33)

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vivian fernandes (bombay)
12 Feb, 2008 09:21 AM
I have recently started working for the aviation industry and i have come to learn that although building a plane sounds easy there are so many parts that have to fit together that it is a mind boggling process.. However like many of the readers have mentioned,it should not take us 24 years to make a plane fly .. I do agree that the indian scientists are underpaid and i think it is high time we start bringing in private contractors like most of the western countries do.. so i think the only solution to this problem is to bring in people who know what they are doing and not leave projects in the hands of un educated,3rd rate politicians who might as well sold the parts for the plane on the black market to line their pockets..

Kotresh Tambrallimath (Bangalore)
12 Feb, 2008 09:00 AM
Indian Scientist salary is 5 to 10 times less than normal software Engineer salary. Because of this transition rates are high, so project is getting delay. Regarding cost of project, all are talking about 5000 cr. but how many billions of dollars US has invested to come to this position ??? Developing our own technology and building LCA is far far far better than Buying Black box(F16). I am very much thankful to all our scientists who are working in ADA and DRDO for there effort and dedication.

Krishna (Pennsylvania, PA)
12 Feb, 2008 08:31 AM
Well…I have worked on the LCA’s cockpit software programs in the early 90s. I know very well that we tried imitating F16’s fly by wire technology. We even followed USA DoD standard for software documentation. But I don’t understand why there is so much delay in taking off. I think we could not even copy something properly.

Prasad (Atlanta, USA)
12 Feb, 2008 08:24 AM
Even if we consider 12K Crore to develop an aircaraft from scratch (and belive, me there are many more things to an aircraft apart from the engine), I think it is not a bad price. Considering India has 12 lakh crores in its coffers as foreigh exchange and its income has multiplied manifold in past few years, 12 K crores for this project is not at all astronomical. We have to be cognizent of the fact that the project was executed by a government agency in complete isolation until recently without any private participation. India has learned a good lesson from it and is now encouraging privte participation in these kind of projects. I think we need to look at it much more positively. Every project is a learning curve and we have learned our share from this one too. I find such reports a bit too harsh towards all the good work which has gone into it. As a responsible mouthpiece of Indian media your esteemed publication should refrain from publishing such articles, which show our research establishments in bad light.

Rishi (Bangalore)
12 Feb, 2008 08:21 AM
Its time for the government to come out of the politics and took hard decision and recruiting from top premier colleges by offering them competetive pay.India have enough talent to build anything the only thing is that there should be strong will power behind it.