The orders of about ₹500 crores for the companies producing for defence sector have been cancelled by the sudden change of policy by the Narendra Modi government. With this, thousands of people have become unemployed, many factories have closed down or are about to be closed and material worth crores of rupees is being wasted. All this is happening when the government is harping on Make in India in the defence sector. About 50,000 employees are facing unemployment in these small scale companies.
There are more than 6000 micro, small and medium factories (MSME) factories working for defence and aerospace sector. They only produce for the defence sector. They do not make anything for the general market. The Narendra Modi government is making a lot of noise about eliminating the deficiencies in the defence sector, but the reality is that the production target of 41 ordnance factories of the country has been reduced to ₹10 thousand crore in 2018-19. Earlier, their target was fixed at ₹17,500 crore.
Naturally, it has a direct bearing on those small units because their order has been reduced considerably. Then, in order to benefit some big private companies, recently, the delivery orders of many factories were stopped by just a single email. That is, the government has refused to take their finished product without giving any reason. Due to this, more than 1000 MSMEs are on the verge of being completely destroyed and about two-three thousand crore rupees of these units are stuck.
All India Defence Employess Federation’s general secretary C Sreekumar told National Herald that the Modi government is destroying ordnance factories to promote their favourite private corporate houses in defence. Never in the history it has happened that the production target of these factories was cut down. Former Defence Minister AK Singh Antony said that this exposes how the Modi government is lying in the name of ‘Make in India’.
National Herald visited some of these factories. Naturally, the entry in the premises is prohibited due to security reasons. However whatever could be seen and observed raises a serious doubt over the government policies. Ammunition packing machines in the factory of Imperial Engineering Company (IEC) in Yamunanagar industrial estate in Haryana are up for sale. Many of them have already been packed. But now, everything is lying right there as is. The employees are desperate but are not ready to talk. IEC owner Amit Ghai says with deep frustration, "We are on the ventilator." The factory got orders from the Ministry of Defence on February 28, 2018 but suddenly on May 14, 2018, they received a one-line email from Bhusawal Ordinance Factory to not dispatch this order. The mail said if they send it, then the concerned officials in the defence ministry have been asked not to accept it.
This is Amit’s ancestral business. Before this, his product was never stopped or rejected. He did not even receive any objections. Amit Ghai's grandfather, Brahmalal Ghai, started this work of defence manufacturing with a feeling of patriotism. It was continued by his father Ramkumar Ghai. Today, Amit along with his brother Deepak looks after this business. But the factories of all the three are on the brink of closure. Amit wrote many letters about cancellation of the order, he also met several concerned officials. But nothing came of it. The Defence Minister has not even given time to meet them so far. He says, “ Now I have no option other than closing down my ancestral business.”
More than 1000 MSME factories in the defence sector spread across Delhi, Haryana, Rajasthan, Bhopal, Hyderabad, Pune, Nagpur are facing the same situation. They mostly make packaging products related to ammunition. Owner of Packwell Paper Tube Industries in Sonipat, Haryana and CEO of Federation of MSME Vendor of Defence and Aerospace, Neeraj K Mehra said, “how can the government reverse its order in two months? The order was given in February and it was terminated in May. So, within two months, the government’s requirement changed or ended? The second most important thing is that when we met the MGO ( Master-General of the Ordnance) on June 18 in this regard, he denied that there was any shortage of fund and said that is the realignment of the budget. On September 25, Chairman of Ordnance Factory PK Shrivastav assured that the order will be reimplemented soon. But it’s mid November and nothing has happened as yet.
Sushil Gupta of MK Industries in Jabalpur said that Modi government is promoting private companies in the name of PP model. Policies are also being altered for the same reason. The matter of the fact is that there is almost no work order with the Ordnance factories now. Due to this, MSMEs dependent on it are on the verge of closing down. Federation chairman Neeraj Raizada too is upset over the fact that neither the Defence Minister Nirmala Sitharaman nor anyone else in the government has the time to listen to the 6000 MSMEs working for the defence sector.
Target of government factories also cut down
Due to the reduction in production target, the crisis in Ordnance factories of Kanpur, Bhusawal, Chanda, Jabalpur has deeply intensified. In the given situation, the unions there have warned of going on strike. All India Defence Employees Federation's General Secretary C Sreekumar told National Herald that the Modi government is destroying ordnance factories to promote their favourite private corporate houses in defence. Never in the history it has happened that the production target of these factories was cut down. Former Defence Minister AK Singh Antony said that this exposes how the Modi government is lying in the name of Make in India.
In the Defence Procurement Policy draft, 2018, promoting and encouraging MSME has been clearly mentioned. But it is virtually a policy which will shut down these industries engaged in defence production for years. The decision to put the products of Ordnance factories in the non-core section is the root cause for the plight of these factories. Because of this decision the packaging of ammunition and making soldiers’ uniforms have been placed in the non core sector. What then will happen to the Ordnance factories and the thousands of industries associated with it--this was not even given a thought. Jabalpur's Ordnance Factory, which manufactures vehicles, is also in a bad shape because manufacturing vehicles has also been put under the non core section.