Defence Budget on priority! Modernization and Infrastructure development leads Defence allocation

In the Union Budget 2023-24, the Capital Investment Outlay for Defence ministry has been increased steeply for the third year in a row by 33 per cent to Rs 10 lakh crore, which would be 3.3 per cent of GDP. This will be almost three times the outlay in 2019-20.

 

 

 

 

Accordingly, the Capital Allocations pertaining to modernisation and infrastructure development of the Defence Services has been increased to Rs 1,62,600 crore representing a rise of Rs 10,230 crore (6.7%) over FY 2022-23. Also, the increase in the Capital Budget since 2019-20 has been Rs 59,200 crore (57%). This increase is a reflection of the Government’s commitment towards sustainable augmentation in the area of modernisation & infrastructure development of the Defence Services.

 

 

Accordingly, the Capital Budget of Border Roads Organisation (BRO) has been increased by 43% to Rs 5,000 crore in FY 2023-24 as against Rs 3,500 crore in FY 2022-23. Also, the allocation under this segment has doubled in two years since FY 2021-22. This will boost the Border infrastructure thereby creating strategically important assets like Sela Tunnel, Nechipu Tunnel & Sela-Chhabrela Tunnel and will also enhance border connectivity.

 

 

 

 

 

Regarding the Capital Outlay on Defence Services, the Union govt's total budget support in Public Enterprises remains the same as in the previous year; Rs. 1310 Cr. , however, with a slight difference of distribution among the PPP players as there is a marginal increase in the monetary support provided to Armoured Vehicles Nigam Limited (AVNI) from Rs. 282 Cr last year to Rs. 290 Cr in the present year's budget and a similar increase is observed in the support to Munitions India Limited where an increase is observed from Rs 577 Cr to Rs 580 Cr.

 

 

Towards strengthening Research and Development in Defence, the allocation to DRDO has been enhanced by 9%, with a total allocation of Rs 23,264 crore in BE 2023-24. To further foster innovation, encourage technology development and strengthen the Defence Industrial ecosystem in the country, iDEX and DTIS have been allocated Rs 116 crore and Rs 45 crore respectively representing an enhancement of 93% for iDEX and 95% for DTIS over 2022-23. This will fulfill the Ministry of Defence’s vision to leverage ideas from bright young minds across the country.

 

 

 

 

 

The Union Budget 2023-24 has announced a National Data Governance Policy to unleash innovation and research by start-ups and academia. This will enable access to anonymized data which will further boost the Defence Start-ups and iDEX scheme. The Union Budget 2023-24 has also announced that the revamped Credit Guarantee scheme for MSMEs which will take effect from 1st April 2023 through infusion of Rs. 9,000 Crore in the corpus. This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit has also been reduced by about 1 per cent. This scheme will give a further fillip the MSMEs associated with the Defence Sector.

 

 

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