All defense PSU’s would immediately be put in the public-private partnership domain by the government divesting 75% of the stock to the public.
Of this divestment, small investors with limits of 5000 shares per person, would have 35% of the shares on offer, thus creating a genuine public stake in these enterprises which in turn would lead to accountability to the nation, and consequently would lift operations.
40% would be offered to industrial houses or private equity who may wish to run the management of these Public-Private Partnership (PPP) entities.
The public-private enterprise with management resting with the private partner; with oversight by the public state stake-holders would ensure speedy lift in operational efficiency and delivery to essential parameters.
The 40% block could also be on offer to a conglomerate of Indian industrial houses, or to institutional investors to ensure the strongest possible Defense enterprise architecture.
This could be especially useful in keeping the narrative as wholly Indian as possible in the complex world of Defense technologies.
Investments in these Defense enterprise through shares would be also open to generations of Indians living abroad.
Operational control of the new entities would rest with the 40% share block with public-state oversight.
If the management control of the enterprise is through a majority of shareholder voting led by an organization in case the share subscription is fragmented, public-state participation may be warranted.
The Government would remain on the Boards of these enterprises and will, in instances of national security as laid out in the Disinvestment Document, retain Veto Rights to any proposal or activity of the concerned public-private enterprise.
Other than that, the management of the enterprises would have a free hand where the manufacturing and marketing of products
Any excess capacity developed for products that have global demand: after catering to the national need / orders, these enterprises would be free sell to any customers anywhere, within the proviso of national security related government sanction for sale to the foreign customer.
Technology acquisition and development through the building of teams and groups of experienced and trained personnel in given and identified areas of technologies, will be a priority where the PPP entities would find active and full government support.
Technologic strength must be acquired through bringing in or upgrading the country’s capacity to design and build machines
All personnel employed in these entities would need to undergo requisite time bound security clearances prior to their employment.
The government security investigation and clearance resources would be strengthened as a matter of urgency.