Defence Budget 2022: 3 things you need to know!
Union Minister Nirmala Sitharaman presented the Budget for FY22-23 on Tuesday. Let us look at what the Union Minister has for the defense sector. Below are the key highlights for the defence sector:
Capital Expenditure - The capital expenditure outlay for the defence sector has increased by a substantial percent in FY23. The budget has increased capital expenditure outlay by 13% to Rs 1.52 lakh crore from the previous year Rs 1.35 lakh crore. The revenue and pension expenditure have remained stable. The Budgetary allocation to the Ministry of Defence has risen 9% year-on-year to Rs 5.25 lakh crore in FY23 from Rs 4.7 lakh crore in FY22.
Push for Atma Nirbharta - Union Finance Minister said that 68% of the defence procurement budget in FY23 would be earmarked for domestic equipment, up 10% percentage points from FY22. Finance Minister wants to encourage research and development by private corporations, start-ups, and academia into defence research and equipment development.
Private sectors - The private sector can now develop military platforms in collaboration with the government-owned Defence Research and Development Organisation. The defence budget consists primarily of a large capital outlay, revenue expenditure (for small acquisitions and spares) and defence pensions.
Experts believe that the allocation of 25% of the defence R&D budget for startups, academia, and private industry is a much-needed reform. This will be a positive move in particular for startups and MSMEs to have their in-house R&D.