Now Reading: Parliamentary panel flags Rs 600 crore loss, idle small-arms factories
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Parliamentary panel flags Rs 600 crore loss, idle small-arms factories
A Parliamentary Standing Committee on Defence report has revealed that India's small-arms factories suffered cumulative losses of Rs 600 crore between 2015-16 and 2025-26, with idle capacity and quality defects undermining viability…
The Story in Brief
A Parliamentary Standing Committee on Defence report has revealed that India's small-arms factories suffered cumulative losses of Rs 600 crore between 2015-16 and 2025-26, with idle capacity and quality defects undermining viability even after corporatisation. Between 2015-16 and 2019-20, the armed forces accounted for just 10 per cent of offtake, leaving factories dependent on insufficient MHA orders.
The committee found high overheads pushed up unit costs while issue prices stayed below actual cost, leading to Rs 366 crore losses before corporatisation and another Rs 234 crore loss at AWEIL in FY23-26. It also flagged recurring barrel bore chip-off, low rate of fire and breech-block defects, and noted that inventory worth Rs 641 crore was held as of March 2020, far exceeding the 135-day stock limit. The ministry has been asked to push institutional reforms, including multi-year demand planning and cost benchmarking against private firms.
The Indian Opinion
The usual narrative blames PSU inefficiency alone, but the committee shows the armed forces themselves placed almost no orders. Corporatisation was supposed to fix things, yet losses continued. Fingers are pointed at high employee benefits and poor quality, but demand planning from the buyer is equally broken. The real test will be whether the ministry accepts cost benchmarking against private manufacturers and a multi-year demand plan, or keeps passing the buck.
Source: indiatoday.in
This story was synthesised by AI from the source linked above.
