HAL running smoothly despite borrowings from banks: Govt

The government Monday rejected claims that state-run aerospace major HAL was adversely affected by non-payment of dues and said the company was carrying out its business operations smoothly.

In a written response to a question in the Rajya Sabha, Subhash Bhamre, Minister of State for Defence, said the Hindustan Aeronautics Limited owed Rs 1,250 crore to its vendors and contractors.

"Hindustan Aeronautics Limited (HAL) is continuing its business operations smoothly including uninterrupted supplies and services to the defence forces, notwithstanding that it has taken short-term borrowings from banks.

"The dues pending for payment by various divisions of HAL to vendors/contractors is to the tune of Rs 1,250 crore. Pendency of dues is dynamic in nature and payments are made as per availability of funds," he said.

The state-run company has been in news over allegations by the Opposition that it was overlooked when India and France signed an inter-government agreement to procure 36 Rafale jets and the offset contract was awarded to a private company.

Last month, HAL said it had taken an overdraft of Rs 962 crore to meets its current requirements. Also, there were reports that it was forced to borrow money to pay salaries to its employees.