New DelhiWith the commencement of big-ticket capital acquisition programs such as submarines, light tanks and fighter aircraft in the new financial year, the defense forces and industry are expecting big allocations in the upcoming annual budget.
Sources in the defense and security establishment said the three services have demanded more funds in their presentations to the defense ministry. Which in turn has taken it up with the Ministry of Finance.
There is also hope for a non-institutionallapsed fund for modernization program.
Meanwhile, the private sector is also looking for a higher budgetary allocation for defense capital expenditure as this would translate into fruitful more acquisition programmes.
Sources said that there is no doubt that there will be a huge increase in pension allocation Amendment One Rank One Pension Scheme This would result in an additional annual expenditure of Rs 8,450 crore over a period of three years apart from payment of dues of Rs 23,638 crore.
In the budget of 2022-23, the government had increased The capital outlay for the purchase of new equipment has been increased from the revised estimate of Rs 1.38 lakh crore to Rs 1.52 lakh crore.
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Big-ticket items on board
Sources said Project 75I, which involves construction of six new submarines under the strategic partnership model, is a high-cost item for the Navy. Sources said the plan is to complete the process of signing the contract within the next financial year and push for the procurement of 27 Rafale maritime fighter jets.
However, he acknowledged that a back-up plan was in place of Order for more Scorpene-class submarines in case of P-75I remains stuck as Reported By ThePrint on several occasions earlier as well.
Sources said the Navy will sign a contract this year for the purchase of specialized naval drones past payment schedule For ongoing projects like new frigates and destroyers.
From the Indian Air Force’s point of view, sources said additional fighter aircraft are high on the agenda. The government has to decide whether it wants to go for MRFA (Multi-Role Fighter Aircraft) or directly talk to French firm Dassault Aviation for additions. Rafale fighter,
Asked about the immediate major expenditure, the sources said payments are due for upgrading some Sukhois to carry S-400 air defense systems and additional BrahMos missiles, besides procuring other missile and drone systems.
Sources said the army is looking to induct a large number of troops, including new artillery gun systems and drones, during the new financial year. He informed that the force has been able to spend almost the entire money allocated for the year.
Several sources ThePrint spoke to mentioned that a non-lapsable fund is necessary to keep the modernization process going.
“Many a times, the entire allocated money is not spent due to delayed payment schedules and delays in delivery. This does not mean that money is not needed. A non-lapsable fund will ensure that the process of modernization is consistent,” said a source in the defense establishment.
private sector eyes on boom
While big companies are eyeing more contracts, smaller companies are hoping that the government will step up research and development (R&D).
“We are happy that R&D in defense will be a focus area. Inviting private industry in defense research has the potential to level the playing field between India and defense exporting countries,” said Wing Commander Sai Mallela (Retd. ), said CEO-Defence, Grain Robotics.
Sandeep Shah, co-founder and MD, Optimized Electrotech, said that Amid fears of a global recession, India is set to grow.
“We should use this opportunity to increase our overall defense spending as well as our GDP spending,” Shah said. “R&D allocation given to DRDO [Defence Research and Development Organisation] and others similar Institutions should also include a budget for procurement from startups who have innovative products. This will encourage the industry to invest more in innovation for defense,” she added.
Crown Group Chief Financial Officer Jitendra Mittal said the defense industry expects the budget to focus on research and development, quicker orders, creation of test facilities and an ecosystem to support innovation for the defense and aerospace industry.
(Edited by Geetalakshmi Ramanathan)
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