10% stake sale kind of ideas will not cut it. the anatomy of a corporate culture is such that unless control of one entity is diluted significantly and until there are not enough independent directors on the board, the company will never grow
I don't think that the 10% is enough either, but it's one hint that government has understood that something has to change. The problem however is, that everybody thinks government companies are like private companies and would have to grow. That is not the case!
HAL is not aimed on growing and earning money with exports or other buisiness types, that's only a side field. The main aim is to develop and produce arms and techs for Indian forces, according to their requirements. Privat companies on the other hand are not looking at specific requirements of Indian forces, but on what is the most profitable solution. A Dhruv that is useable in high altitude areas and diverse climate conditions is important for Indian forces, but not for other countries and without such requirements, we could even develop and produce it at lower costs.
And when you talk about bank growth, the limitations GoI had put on Indian banks, compared the to their western counterparts, were the only reason why India is one of the very few democracys that wasn't hit much by the global banking crisis in 2008. Most democracys and especially tax payers regret it today, that their governments let the Banks do as they wished, because the result in many nations was that the governments had to bail out the banks with billions of money, because the banks were completely uncontrolled and focused only on their own growth and not the national interest. But that is the point, government companies or banks must have a priority on national interests!
If they set up own subsidiary and do a JV with reliance to supply people (like what GE did in China), then the 'value' of staff and infra can very easily reach 50% of total cost and they can still keep IPR (real TOT stuff) with them and charge the manpower and infra at cost plus a small % profit and demand a higher % return for their design from the JV for the french entitý and take the 'real' profits out, without transferring any knowhow...
That's why it's so important that the ToT is aimed on improving mainly the government companies first, to get critical ToT to those companies that we need for further developments. Indian privat companies again would only look at the profit they can make through this deal, not at the technological benefit India would have for the long term. But again, the problem is, that we have only DRDO and HAL as main companies and both have already too many responsibilities to be effective.
I am really speaking from genuine engineering experience here that engineering knowlege can be transmitted and may be absorbed as well, but R&D philosophy is not transferable in practical terms...
And I fully agree with that, since it also confirms my point of view on Chinese defence industry capabilities today. But they already have a very capable industrial capability to produce things in a very effective and fast way, something that we still lack and that is the base that we still need. We can produce composits and fit it to airframes in big ammounts, but what's the use when we lack in design which causes drag and weight issues at nearly any indigenous aircraft development? So we need to learn the basics of design, R&D and sometimes even simple logical project management. Learning from experience foreign partners during co-developments or even JVs will give us much more in this case, than trying it alone, since it takes simply too long to catch up, while others are already improving.
Take the Scorpene sub as an example, we struggle to absorb the ToT to build the sub in the fast way the French could do it, which is mainly a problem of the shipyard. DCNS itself on the other hand is building parts for the sub in their facility in India without delays and in time. So we can do it, but we still have to learn how to do it the most effective way!
Did we learn from it and improve it? Have we put in infrastructure to mature that technology further? Do we really have developmental programs?
Defenitely not in all fields, but for the aero sector for example we can say we do have improved our knowledge wrt to materials and avionics to a very modern level. We can develop airframe parts and avionics for any modern fighter, helicopter or civil aircraft in India today, that's why HAL, or TATA gets several orders from Airbus, Eurocopter, Boeing, Sikorsky or Agosta Westland.
That's why I still have much confidence in LCA and believe that even MK1 would offer much much more than any Mig 21 version today. It just didn't came up to the high expectations so far and suffered too much from our indigenous industry.
We have been now doing SU30MKI engines for few years (under TOT) and let alone developing the design of the engines further, we are still struggling with design of Kaveri and had to buy GE404s... Answer of this is in my point 2... What is TOT? that scope... the devil is there my friend. It is just not the same thing that we think it is.
Exactly, but that was in the late 90s and one of the first procurements where we got ToT in useful forms at all and now compare what is on offer today! Snecma and Russian manufactures offers us co-developments with critical techs, Eurojet hast offerd us critical techs and joined development of TVC during the LCA engine evaluation, Russia now offers us a co-development of the NG AL 41 engine.
Time has dramatically changed and in favour for us, we went from licence production with limited ToT for Mig 21s, to lincence production with good ToT for MKI, up to co-development offers of western countries with critical techs. We now only have to use it the right way to benefit for future projects.
I find it hard to believe that we will learn from Kaveri kind of issues... As long as govt companies have no accountability for failures
Fully agree with you on that and I am one of the few who constantly criticize DRDO, or ADA and that we cherish them for small improvements, but never take them as responsible for mistakes or even failures. The typical Indian answer to development failures is, politicans are the problem!
You might not agree, but the reality of competition is that success leads to success, but competition is the ultimate leverage tool and we just don't have that leverage for jokers sitting in companies like HAL and non-missile areas of DRDO etc etc
Not at all, I agree with you that we need competition, but where we differ is the way to it. I don't see private companies as the perfect role models and the only solution for India, because that makes us dependable on them as well (see what Dassault now tries to do). In any indigenous development, government needs to have control about the outcome. That's why I want to make our government companies to improve, while privat companies should assist them in a more valuable way.
To conclude, I think we are talking the same things in spirit, just different models of implementation.
Exactly, there are different ways to take these issues on and that's the main point where we differ, which is not even a problem, because looking at problems from different angles is always helpful.
