A younger person should head the Defence Research & Development Organisation, Defence Minister Manohar Parrikar said Tuesday.
Parrikar added that it was on his recommendation that DRDO chief Avinash Chander's contractual term was ended.
Congress leader Digvijaya Singh questioned the sudden decision.
Parrikar, however, said there was no "controversy" in Chander's removal.
"I recommended that a person on contract should not be occupying such a senior position. This senior position should be filled by other eligible senior persons. There is no controversy here," Parrikar said Tuesday.
"I believe DRDO should be headed by a younger man... I had proposed for his removal and they have agreed to it."
The Appointments Committee of the Cabinet (ACC) approved the termination of Chander's contract with effect from Jan 31.
A notification was put up on the Department of Personnel and Training (DoPT) website, but removed later.
DRDO officials said they did not receive any official information Monday on Chander's removal.
Chander, widely known as the man behind the Agni series of missiles, retired Nov 30, 2014, at the age of 64. The government, however, approved that he continue on contract thereafter and the contractual term was to end May 31, 2016.
Congress leader Digvijaya Singh questioned the government's decision, and sought an explanation on Chander's sudden removal.
"Avinash Chander DRDO Chief dismissed 15 months before his term expired. Would Government please explain?" Digvijaya Singh tweeted.
Chander was the secretary, Defence Research and Development, cum director general, DRDO, and scientific advisor to the defence minister.
Asked if the sudden termination of the DRDO chief without informing him was right, Parrikar said, "I also got the information from you, from paper and TV."
"The tenure of DRDO chief would normally have ended in November but the previous cabinet had approved a three-year extension to his term, with the additional years being on contract," Parrikar told reporters.
The minister added that the post would be filled by someone for now till a permanent replacement was found.
"As of now, the person to replace him has not been decided. We will fill the post temporarily by someone who has the urge for development."
Government sources said nuclear scientist Sekhar Basu is likely to be named the new DRDO chief.
Basu, who heads the Bhabha Atomic Research Centre, is the man behind the nuclear system that is driving the Arihant-class submarines of the Indian Navy.
A search panel headed by the cabinet secretary will pick Chander's replacement from among top DRDO scientists.
The DRDO had faced criticism from Prime Minister Narendra Modi August last year, when he said the "chalta hai" attitude will not help and asked the DRDO to come up with cutting edge technology.
In the same speech, Modi also laid emphasis on promoting young talent in the DRDO.
The DRDO was set up in 1958 to develop indigenous military technology and cut back on arms imports.
The National Democratic Alliance (NDA) government headed by Modi has been emphasising on promoting "Make in India" in defence sector.
India meets nearly 80 percent of its defence needs with foreign imports.
India is the world's ninth biggest military spender, according to Stockholm International Peace Research Institute's (SIPRI) report on world military expenditure for 2014.
The organisation, which is India's premier agency in defence research, has several projects marred by delays.
These include light combat aircraft Tejas, the Kaveri engine, long range surface-to-air missile, helicopter version of third generation anti-tank guided missile Helina, and air-to-air missile Astra among others.
Parrikar's predecessor Arun Jaitley, in a reply to parliament during the budget session last year, had cited "technology challenges, lack of skilled manpower and infrastructure in the country" as a key reasons for the delays of the projects.
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