New Delhi: In her budget presentation in the Lok Sabha, Union Finance Minister Nirmala Sitharaman on Tuesday announced several steps to promote self-reliance in the defense sector and reduce dependence on imports of defense equipment.
In his speech, the finance minister said that 68 per cent of the defense procurement budget in FY 2013 would be earmarked for domestic equipment, a 10 percentage point increase from FY 2012. He said that about 25 percent of his budget to collaborate with private industry in defense research and development (R&D).
A new independent nodal umbrella body will be created for private players to test and certify new technology, Sitharaman said.
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In his speech, the Finance Minister said, “Our government is committed to reduce imports in equipment for the armed forces and promote self-reliance. In 2022-23, 68 per cent of the capital procurement budget will be earmarked for domestic industry, which It was 58 percent in 2021-22.
He said that the private sector would be encouraged to design and develop military platforms and equipment in coordination with Defense Research and Development Organization (DRDO) and other organizations under the SPV model.
In FY 2012, the capital outlay of the ministry was Rs 1.35 lakh crore, a jump of nearly 19 per cent over FY 2011, with the bulk targeted at new acquisitions and military modernisation.
The revenue outlay increased marginally to Rs 2.12 lakh crore, while the defense pension outlay declined year-on-year (YoY) to around Rs 1.16 lakh crore.
Defense R&D will be opened up to industry, start-ups and academia with 25 per cent of the Defense R&D budget. Private industry will be encouraged to design and develop military platforms and equipment in collaboration with DRDO and other organizations through the SPV model. An independent nodal umbrella body will be set up to meet the comprehensive testing and certification requirements,” the minister said.
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