Defence Minister AK Antony on Wednesday warned under-performing state-owned defence manufacturing units that they were in danger of being washed away by their competitors if they did not shape up.
"I am not satisfied with the functioning of some defence public sector undertakings and ordnance factories," an unusually combative Antony said at a function for giving away awards of excellence to state-owned units.
"They are not working properly. They must improve otherwise it will be difficult to survive in the current era of change," Antony stressed, while departing from the prepared text of his address.
"The government can support you up to a point but you must fulfil your promise to deliver or no one can help you in this era of competition," he maintained.
"At the same time, those at the top must innovate or they will not be able to retain their top position. There is always scope for improvement."
Urging defence public sector undertakings and ordnance factories to spend more on R&D, Antony pointed to the example of the pharmaceuticals sector, both government and private.
"Unless you spend more on R&D, you will not be able to take advantage of the technology that will flow into the country from (the) offsets (clause governing imports of military equipment). This will be a tragic loss to the nation," the minister asserted.
Under India's new defence procurement policy announced last year, 30 per cent of all deals valued at over Rs 300 million have to be re-invested in the country. It has been estimated that this will bring in some $8-10 billion over the next five years.
During the address, Antony noted that India's burgeoning economy and its growing clout in international affairs posed a fresh challenge for the armed forces and necessitated a rethink on the priorities of defence preparedness.
"The increasing demand for latest and high-end technology products and services requires constant upgrading of technologies through in-house development and other means like acquisition," he maintained.
Noting that defence public sector undertakings and ordnance factories possessed high-end technologies, Antony said: "Exchange of information and pooling of technological resources will ensure better utilisation of assets and bring about a qualitative improvement in products. It will also avoid duplication of efforts and give more value for the money invested."
Appreciating the fact that several private sector companies have obtained licenses for production of a wide range of defence-related products, the minister urged public sector companies to come out of the "safety zones and understand that we are not living in a monopolistic age".
"At the same time, it must be emphasised that the public sector and the private sector need not look at each other as rivals, but rather as partners of the government on our march toward the growth and development of India as an economic superpower and a military powerhouse," Antony contended.