Centre's greed, more than dues from defence forces, could be the real reason behind the sorry state of financials of Hindustan Aeronautics Limited (HAL), the public sector firm which is at the centre of the war of words between Raksha Mantri Nirmala Sitharaman and Congress President Rahul Gandhi.

Cash rich PSU HAL has been forced to borrow funds to pay salaries to its employees for the first time in history. While the government-owned HAL may be inhibited and too coy to disclose this, a closer look at the PSUs financials reveal that its immediate troubles may not necessarily be the Rs 15,700 crore of dues from the defence forces. Instead, Centre may have sucked HAL dry over the past 4 years.

"Our cash in hand is in the negative, we've had to borrow close to Rs 1,000 crore as an overdraft (OD). By March 31 we'll have minus of Rs 6,000 crore, which becomes unsustainable. We can borrow for day-to-day work but not for project purchases," HAL CMD R Madhavan has said. Madhavan also said the defence forces owe HAL Rs 15,700 crore in unpaid dues for equipment and services rendered.

However, closer examination of HAL's account tells a completely different story.

In 2017-18, HAL paid Rs 1,295 crore as dividend to the Centre-that's nearly double of the Rs 577 crore payout in 2014-15. While dividend payout has nearly doubled in the past 4 years, HAL's revenue, in comparison, has grown barely 18 per cent from Rs 15,730 crore in 2014-15 to Rs 18,519 crore in 2017-18.

This wasn't the only hit it took on its balance sheet. During 2017-18, HAL also bought back 7.5 per cent of its equity from the government costing another Rs 1,128 crore in outflows to the Centre. "Company has bought back 2,71,12,500 equity shares of Rs 10 each from the President of India representing 7.5% of the Share Capital on 19th December, 2017," HAL said in its filings.

These two massive payouts worth Rs 2,423 crore may have completely drained an already cash deficient HAL, forcing it to borrow to pay salaries. These left it with negative cash flows of Rs 2,682.85 crore at the end of the fiscal.

HAL spent an average of Rs 358.33 crore every month in 2017-18 and another Rs 1,000 crore on procurement. HAL had 29,035 employees as on March 31, 2018.

(With inputs from Mudit Kapoor)