Manufacturing India: PSUs

Just after independence when the big industrial houses were not ready to put its money in capital intensive manufacturing sectors, be it steel, machine tools, shipbuilding or even drugs or telephone sets, the government decided to set up PSUs in almost all the sectors. Pandit Nehru called them ‘the new temples of modern India’.

According to a study by globalisation advisory firm Zinnov, the public sector in India gives employment to 1.4 million people and 40% of PSUs operate in the manufacturing sector. “India is a hub of 225 PSUs operating across verticals, with 16 of these companies featuring in the global list of top 2,000 companies. With their growing size and dominance, PSUs have started looking at IT to address the global competition. Examples like SBI, which has done one of the largest Core Banking Solution implementation globally or BPCL which has made early investments in Big data make the segment very lucrative for the technology companies.” “India is a hub of 225 PSUs operating across verticals, with 16 of these companies featuring in the global list of top 2000 companies.

1. Bharat Dynamics Ltd:BDL was established in July 1970 under the control of Ministry of Defence with the prime objective of establishing a production base for guided missiles in India. It is now one amongst a few strategic industries of the world having the capability to produce the most advanced guided missile systems for Armed Forces.

2. Bharat Earth Movers Ltd: Bharat Earth Movers Limited is a premier ISO 9001-2000 Company in India and the second largest manufacturer of earthmoving equipment in Asia. A four- decade-old multi-locational and multi-product company, BEML has vital applications in diverse sectors of economy such as coal, mining, steel, cement, power, irrigation, construction, road building and railway. It has expanded its product range to cover high-quality hydraulics, heavy-duty diesel engines, Welding robots and undertaking of heavy fabrication jobs.

3. Bharat Heavy Electricals Limited (BHEL):BHEL manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian Economy viz., Power Generation & Transmission, Industry, Transportation, Telecommunication, Renewable Energy, etc. The wide network of BHEL’s 14 manufacturing divisions, four Power Sector regional centers, over 100 project sites, eight service centers and 18 regional offices, enables the Company to promptly serve its customers and provide them with suitable products, systems and services – efficiently and at competitive prices.

4. Heavy Engineering Corp. Ltd: HEC was established in the year 1958 as one of the largest Integrated Engineering Complex in India. It manufactures and supplies capital equipments & machineries and renders project execution required for core sector industries. It has complete manufacturing set up starting from casting & forging, fabrication, machining, assembly and testing – all at one location backed by a strong design – engineering and technology team.

5. Hindustan Aircraft Limited: HAL’s supplies / services are mainly to Indian Defence Services, Coast Guard and Border Security Force. Transport aircraft and Helicopters have also been supplied to Airlines as well as State Governments of India. The Company has also achieved a foothold in export in more than 30 countries, having demonstrated its quality and price competitiveness.

HAL had tried to be many things at the same time. In aerospace, an
integrator company assembles all components made by tier-1 companies
to make an aircraft.Tier-1 companies are those that make engines,
fuselages, wings etc. Tier-2 ones are those that make components for
engines, fuselage, etc. Tier-3 firms are those that make nuts and
bolts, the most basic of components. HAL wanted to be all of them at
the same time. In the process it ended up exposing itself and its
inefficiencies. HAL would have evolved as integrator company while
encouraging many vendors for the components.Even with a huge manufacturing facilities, HAL failed to be a major source for different types of aircrafts or for even helicopters.

India has a number of companies for meeting manufacturing requirements
of the huge railways network and defence services. But hardly few of
them have developed products and that at a scale of global
competitors. It is only because of the lack of accountability or
managerial autonomy of the units. A re-engineering of the
manufacturing facilities of railways and defence on the line of
globally competitive enterprises can boost the manufacturing sector to
a great extent.

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