Business / India sets aside Rs 1 lakh cr for local defence purchase

New Delhi : India on Tuesday earmarked Rs 1.03 lakh crore (Army's capital budget) to buy locally produced weapons and systems to promote self-reliance in the defense sector, apart from setting aside 25% of the defense R&D budget for private industry. 68% of the

Presenting the Union Budget for 2022-23 in Parliament, Finance Minister Nirmala Sitharaman spoke about the government's commitment to promote self-reliance in the defense sector. India allocated Rs 5.25 lakh crore for military expenditure in this year's budget, which includes Rs 1.52 lakh crore capital expenditure for modernization of the armed forces. This year's capital outlay is 12.8% higher than the budget estimate for 2021-22 when it stood at Rs 1.35 lakh crore.

Defense budget of India 2.03% of estimated GDP

The overall budget has increased by 9.7% as compared to last year's allocation. India had set aside Rs 4.78 lakh crore for military spending in its budget for 2021-22 as compared to Rs 4.71 lakh crore in 2020-21. This year's defense budget is 2.03% of the country's estimated GDP for 2022-23. This includes revenue expenditure of Rs 2.3 lakh crore and pension outlay of Rs 1.16 crore.

Army spent Rs 21,000 crore amid dispute with China

Revised estimates in budget documents show that the armed forces spent over Rs 21,000 crore on top of last year's budget allocation. It can also be assumed that India has long taken its tough stand on the border line with China, due to which India had to make emergency purchases and also focus on building infrastructure. Last year, the armed forces spent Rs 20,776 crore on emergency procurement of weapons and systems to enhance their capabilities to meet new security challenges at the country's borders.

In her budget speech, Sitharaman said, "Our government is committed to reducing imports and promoting self-reliance in equipment for the armed forces, and 68% of the capital procurement budget will be earmarked for domestic industry in 2022-23. " He said that private industry would be encouraged to design and develop military platforms and equipment in collaboration with Defense Research and Development Organization and other organizations through the SPV (Special Purpose Vehicle) model.