New Delhi: There is a moderate increase in the annual defense budget despite sustainable military confrontation with China in East Ladakh.
But the government strongly encouraged ‘Atmanirbharta’ (independence) with 68% of the allocation of capital procurement intended for the domestic industry and 25% of the R & D budget for the private industry, startup and academics.
The overall defense expenditure was pegged at Rs 5.25,166 Crore ($ 70 billion), which marked only a 4.4% increase over the estimate of the last fiscal revision and 9.8% for budget estimates.
This, basically, means that modernization for four strong armed forces will continue in a slow and stable way, without the Big Bang intervention.
The capital allocation for the overall modernization and a new weapon system is Rs 1.52 lakh crore, with a much smaller IAF (RS 55,587 Crore) and Navy (Rs 47,591 Crore) gets far greater expenses than the army (RS 32,015 Crore).
But capital expenses are dwared by income expenditure for daily running costs and salaries at RS 2.33 Lakh Crore.
Defense budget RS 5.25 lakh crore works only about 2% of GDP projected for 2022-2023 if the allocation of Defense Pensions Big Rs 1.20 lakh crore is taken into account.
This drops to 1.5% if the retirement bill is excluded.
This when military experts demanded that India had to allocate more than 2.5% for defense expenditure to build the necessary prevention of collusion of China and Pakistan.
However, there was a determined encouragement to make India out of the strategic vulnerable position to be the second largest weapon importer in the world after Saudi Arabia.
“Our government is committed to reducing import and promoting ‘Atmanirbharta’ in equipment for the armed forces,” said FM Nirmala Sitharaman.
He said 68% of the defense procurement budget would be intended for the domestic industry in 2022-23, up from 58% in the last fiscal.
Industry, startup and academics will also get 25% of the annual R & D budget, which has largely become the preservation of PSUS Drdo and defense until now.
“The private industry will be encouraged to take the design and development of military platforms and equipment in collaboration with Drdo and other organizations through the SPV model (special purpose vehicle).
The body of the independent nodal umbrella will be arranged for extensive meetings and certification requirements,” Sitharaman said.
Defense Minister Rajnath Singh, in turn, said steps were in line with the ‘vocal for local’ encouragement and would definitely improve the domestic defense industry.
“The proposal to order 25% of the R & D budget for startup and private entities is a very good step,” he said.
Indian defense producer community President S Shukla welcomed the announcement to set aside 68% of the defense budget capital expenditure for the domestic industry.
“This will sustain investment and attract new capacity creation,” he said.
“The creation of the Nodal’s body to regulate the testing and requirements of defense system certification and the platform will help the domestic industry through a faster process and cost efficiency.
The allocation of 25% of the R & D budget defense for startup, academics and the private industry is also a very necessary reform , “he added.