October 2, 2022

Budget to give fillip to ‘Make in India’, boost demand, build capacities for New India: Defence Minister

Rajnath Singh termed Budget 2022-23 growth oriented

Further impetus to Armed Forces modernisation & defence security Infrastructure development

Total allocation under Capital Outlay of Defence Services enhanced to 1.52 lakh crore

68% of capital procurement budget to be earmarked for domestic industry to promote self-reliance & reduce import dependency

25% per cent of defence R&D budget earmarked for private industry & startups

New Delhi, Defence Minister Rajnath Singh said the Budget 2022 is to give a fillip to ‘Make in India’, boost demand and build capacities for New India. In a series of tweets, he congratulated the Finance Minister on presenting an excellent Union Budget 2022-23, and said it would give a fillip to ‘Make in India’, boost demand, build capacities for a stronger, prosperous and confident India.

The Union Budget for Financial Year 2022-23, presented by the Finance Minister on February 1, has given further impetus to modernisation of Defence Services and Defence Security Infrastructure development, including the Border Road Infrastructure and Coastal Security Infrastructure.

The Union Budget 2022-23 envisages a total outlay of Rs 39.45 lakh crore. Out of this, Ministry of Defence has been allocated a total budget of Rs 5.25 lakh crore, which is 13.31 per cent of the total budget. This includes an amount of Rs 1.19 lakh crore for Defence Pensions. The total Defence Budget represents an enhancement of Rs 46,970 crore (9.82 per cent) over Budget Estimates 2021-22.

Through enhanced budgetary support over the years, the Government has placed modernisation and infrastructure development of the Armed Forces at the centre stage of the National Security and Defence Planning process. The total allocation under Capital Outlay of the Defence Services has been increased from Rs 86,740 crore in 2013-14 to 1.52 lakh crore in 2022-23.

There is an enhancement of 76 per cent over a period of nine years. Further, during this period, the total Defence Budget including Defence Pensions has increased by 107.29 per cent, from Rs 2.53 lakh crore in 2013-14 to Rs 5.25 lakh crore in 2022-23.

Sustained thrust on Modernisation & Infrastructure Development: In the Union Budget 2022-23, the Capital Allocations pertaining to modernisation and infrastructure development of Armed Forces has been significantly increased to Rs 1.52 lakh crore. This represents an increase of Rs 17,308 crore (12.82 per cent) over FY 2021-22. Further, cumulative increase in the Capital Budget since 2019-20 has been Rs 48,975 crore (47.37 per cent).

The increase in the overall Capital Budget reflects the Government’s resolve towards sustainable enhancement in the modernisation and infrastructure development and also towards achieving the objectives of ‘Aatmanirbhar Bharat’.

In order to give push to indigenous Domestic Enterprises under the ‘Aatmanirbhar Bharat’, the share of domestic capital procurement, which was earmarked at 64 per cent in 2021-22, has been enhanced to 68 per cent of the Capital Acquisition Budget of the Defence Services (Rs 1.24 lakh crore) for the FY 2022-23, which would be Rs 84,598 crore.

The Capital segment of the MoD (Civil) budget catering to organisations such as Indian Coast Guard (ICG), Border Roads Organisation (BRO) and Directorate General Defence Estates (DGDE) etc. has also seen a notable jump of 55.60 per cent. In absolute terms, this amount is Rs 8,050 crore in FY 2022-23 against Rs 5,173 crore in FY 2021-22.

The Capital Budget of BRO has been increased by 40 per cent to Rs 3,500 crore in FY 2022-23 vis-à-vis Rs 2,500 crore in FY 2021-22. This will expedite the progress of creation of border infrastructure including important tunnels (Sela and Naechiphu tunnel) and bridges on major river gaps.

Underlining the importance of overall maritime security, the Capital Budget of the Indian Navy has been enhanced by 44.53 per cent, with a total allocation of Rs 46,323 crore in FY 2022-23. This increase is aimed at acquisition of new platforms, creation of Op and Strategic Infrastructure, bridging of critical capability gaps and building a credible maritime force for the future.

Additionally, to boost the Coastal Security, the Capital budget of Indian Coast Guard has been enhanced by 60.24 per cent to Rs 4,246 crore in FY 2022-23 vis-à-vis Rs 2,650 crore in FY 2021-22. This enhancement is aimed at building up of assets such as acquisition of ships & aircraft, augmentation of infrastructure, establishment of coastal security network and building up technical & administrative support structures.

Rs 173.03 crore and Rs 131.08 crore have been provisioned under DGDEs Capital Budget for BE 2022-23 and RE 2021-22, respectively, mainly for construction of boundary posts/pillars and perimeter fencing of Defence Land. This is directed towards preventing encroachment on Defence Land.

Towards hand holding of the newly created seven Defence Public Sector Undertakings (DPSUs), Rs 1,665 crore in RE 2021-22 and Rs 1,310 crore in BE 2022-23 has been earmarked for their planned modernisation. Additionally, Rs 2,500 crore in BE 2022-23 and also in RE 2021-22 has been set aside as Emergency Authorization Fund.

Further, for enabling the Defence Industrial eco-system in the country, iDEX and DTIS has been allocated Rs 60 crore and Rs 23 crore respectively in the FY 2022-23. Under the iDEX (Innovations for Defence Excellence) Scheme, MoD aims to create an environment which fosters innovation and encourages technology development in Defence by engaging R&D institutes, academia, industries, start- ups and even individual innovators.

Defence Testing Infrastructure Scheme (DTIS) envisages the creation of state-of-the-art testing infrastructure in partnership with the private industry thereby boosting domestic defence and aerospace manufacturing.

Budget Announcement 2022-23: Aatmanirbharta in Defence

  • Government is committed to reducing imports and promoting AtmaNirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22.
  • Defence R&D will be opened up for industry, startups and academia with 25 per cent of defence R&D budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.
  • An independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements.

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