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Broke HAL’s Reserves Lowest Ever, Borrows Money to Pay Employees
By The Quint
January 05, 2019 at 12:01 PM IST
Cash-strapped Hindustan Aeronautics Limited (HAL) has been forced to borrow money to pay its employees, a first for them in many years, The Times of Indiareported. The public sector undertaking which has been grappling with financial strain since long, is on the verge of coming to an operational standstill, the report added.
Last year, in October, the daily reported that HAL had just about 1,000 crores in its kitty to pay to its “29,000-strong salaries for just three months”, reported TOI.
“We have been cash-rich, this is the first-time ever, or atleast in the past 2-3 decades, we have borrowed money,” R Madhavan, the HAL chairman told the daily.
Also Read: HAL Capable of Producing Rafale Jets, Says Chairman
HAL’s Reserves Touch Lowest Ever
According to the daily, the major reason for the financial strain has been caused by pending dues owed by the Indian Air Force, its largest customer. The armed forces has paid only 2,000 crores since September, 2017 taking the outstanding dues to about 14,500 crores.
The Ministry of Defence (MoD) had approved a budget of Rs 13,500 crore for 2017-18 and a revised budget at 33, 715 crore, including the pending amount from 2017-18.
As of 31 December, its dues have touched 15,700 crores, which will touch 20,000 crores, the HAL chairman informed TOI. Reportedly, of the Rs 15,700 crores due, about Rs 14,500 crore is due from IAF and the rest from the Indian army, navy and the coast guard.
Also Read: Rafale Row: Petitioners Say HAL Involved 2 Days Before Ambani Deal
Broke State to Hurt 2K MSMEs
The financial strain is set to impact multiple stakeholders, including its 2,000 MSME vendors, TOI reported.
“My worry is that shortage of money will force us to keep dues, which will affect them badly. So far, we have managed to keep paying them,” the chairman told TOI.
Besides, all projects such as design projects such as LUH,LCH and serviceability of aircraft will be largely affected. Adding to its woes are depleting order books that leaves the PSU no scope to rely on customers, TOI reported.
‘Always Been Cash-Rich, But Now Reserves in Negative’: HAL Chairman
HAL’s business is dependent on the Ministry of Defence which allots budget to the armed forces and in turn pays to the PSU for business, the daily reported.
Our cash in hand is negative, we have had to borrow close to 1,000 crore as an overdraft. By March, we will have minus of 6,000 crore, which becomes unsustainable. We can borrow for day-to-day work, but not for project purposes. R Madhavan, HAL Chairman to TOI
Reportedly, HAL is now working on getting its overdraft limit increased from the present cap of 1,950 crores.
Broke HAL’s Reserves Lowest Ever, Borrows Money to Pay Employees
By The Quint
January 05, 2019 at 12:01 PM IST
Cash-strapped Hindustan Aeronautics Limited (HAL) has been forced to borrow money to pay its employees, a first for them in many years, The Times of Indiareported. The public sector undertaking which has been grappling with financial strain since long, is on the verge of coming to an operational standstill, the report added.
Last year, in October, the daily reported that HAL had just about 1,000 crores in its kitty to pay to its “29,000-strong salaries for just three months”, reported TOI.
“We have been cash-rich, this is the first-time ever, or atleast in the past 2-3 decades, we have borrowed money,” R Madhavan, the HAL chairman told the daily.
Also Read: HAL Capable of Producing Rafale Jets, Says Chairman
HAL’s Reserves Touch Lowest Ever
According to the daily, the major reason for the financial strain has been caused by pending dues owed by the Indian Air Force, its largest customer. The armed forces has paid only 2,000 crores since September, 2017 taking the outstanding dues to about 14,500 crores.
The Ministry of Defence (MoD) had approved a budget of Rs 13,500 crore for 2017-18 and a revised budget at 33, 715 crore, including the pending amount from 2017-18.
As of 31 December, its dues have touched 15,700 crores, which will touch 20,000 crores, the HAL chairman informed TOI. Reportedly, of the Rs 15,700 crores due, about Rs 14,500 crore is due from IAF and the rest from the Indian army, navy and the coast guard.
Also Read: Rafale Row: Petitioners Say HAL Involved 2 Days Before Ambani Deal
Broke State to Hurt 2K MSMEs
The financial strain is set to impact multiple stakeholders, including its 2,000 MSME vendors, TOI reported.
“My worry is that shortage of money will force us to keep dues, which will affect them badly. So far, we have managed to keep paying them,” the chairman told TOI.
Besides, all projects such as design projects such as LUH,LCH and serviceability of aircraft will be largely affected. Adding to its woes are depleting order books that leaves the PSU no scope to rely on customers, TOI reported.
‘Always Been Cash-Rich, But Now Reserves in Negative’: HAL Chairman
HAL’s business is dependent on the Ministry of Defence which allots budget to the armed forces and in turn pays to the PSU for business, the daily reported.
Our cash in hand is negative, we have had to borrow close to 1,000 crore as an overdraft. By March, we will have minus of 6,000 crore, which becomes unsustainable. We can borrow for day-to-day work, but not for project purposes. R Madhavan, HAL Chairman to TOI
Reportedly, HAL is now working on getting its overdraft limit increased from the present cap of 1,950 crores.
