Indian defence procurement gets Budget boost, Modi govt hikes capital outlay to Rs 1.52 lakh crore
(MENAFN- Trend News Agency)
In a major fillip to the defence sector, Finance Minister Nirmala Sitharaman Tuesday increased the capital outlay for procurement of new equipment by the defence Ministry to Rs 1.52 lakh crore, from the revised estimates of Rs 1.38 lakh crore for the current fiscal.
The overall defence budget, including pensions, stood at Rs 5.25 lakh crore, up from Rs 4.78 lakh crore in the 2021-22 financial year. The new defence budget is 13.3 per cent of the total expenditure planned by the Narendra Modi government for the financial year 2022-23. It is also about 2.03 per cent of India's nominal GDP (pegged at Rs 258 lakh crore) for the 2022-23 fiscal.
Presenting the Union Budget in Parliament, Sitharaman also made a massive push for domestic defence equipment manufacturers, by earmarking 68 per cent of the capital budget for them, while reserving 25 per cent of research and development funds for private companies, start-ups and academia.
“Our government is committed to reducing imports and promoting 'atmanirbharta' (self-reliance) in equipment for the armed forces. Sixty-eight per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22,” she said.
This figure of 58 per cent had been the target in 2020-21, while in the Budget for the 2021-22 financial year, 64 per cent of the capital budget was reserved for the domestic industry.
The finance minister said defence research and development (R&D) will be opened up for industry, start-ups and academia, with 25 per cent of defence R&D budget earmarked for them.
“Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organisations through SPV (Special Purpose Vehicle) model,” she said.
In another pro-industry step, Sitharaman also announced the creation of an independent nodal umbrella body for meeting wide-ranging testing and certification requirements.
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