India’s leading defence PSU Hindustan Aeronautics Limited (HAL), is keenly awaiting formalisation of orders adding up to Rs 1 lakh crore. Defence minister Nirmala Sitharaman had mentioned about the order during the discussion on the Rafale fighter deal in the Lok Sabha on Friday

BANGALORE: India’s leading defence PSU Hindustan Aeronautics Limited (HAL), grappling with stressed finances, is keenly awaiting formalisation of orders adding up to Rs 1 lakh crore mentioned by defence minister Nirmala Sitharaman during the discussion on the Rafale fighter deal in the Lok Sabha on Friday.

Though the acceptance of necessity, part of the initial approval, and clearance by the Defence Acquisition Council, has been completed for some of the orders, no actual order has been placed yet.

As TOI reported on Friday, the cash-strapped defence PSU was forced to borrow close to Rs 1,000 crore to pay salaries. HAL’s largest customer, the Indian Air Force, had not cleared its dues.

Formalisation of Orders Takes Time 


Defence minister Nirmala Sitharaman told Lok Sabha on Friday that the Modi government had given orders worth Rs 1 lakh crore to HAL. However, even though the acceptance of necessity — part of the initial approval — and clearance by Defence Acquisition Council has been completed for some of the orders, no actual order has been placed yet.

Senior HAL management officials who didn’t wish to be named told TOI that no actual order has been placed and not a single has been rupee released to the company.

The formalisation of orders, which in the case of aircraft needs approvals from the aeronautical development agency and involves discussions on cost, can be time consuming. As TOI reported on Friday, the cash-strapped defence PSU was forced to borrow close to Rs 1,000 crore to pay salaries. HAL’s largest customer, the Indian Air Force (IAF), had not cleared its dues.