- The Budget assures to enhance the household income, and support infrastructure development.
- Defence Budget has seen an unprecedented increase of 18.75 percent in capital outlay.
- 83 indigenously designed and developed LCA MK1A worth Rs. 48000 Crore have been awarded to HAL.
- Under the latest Public Procurement Order 2017, the Government has notified 46 items.
Today, Defence Minister Rajnath Singh spoke about the Union Budget for the year 2021-2022. He said that it was a healthy mix of promise, potential, and progress, whose agenda provides support for the defence and security of the country. The Minister assured that the Budget would enhance the household income, support infrastructure development, and also the health industry.
Addressing the media, he mentioned PM Modi’s new policy, ‘AatmaNirbhar Bharat’. He informed that the Defence Budget has seen an unprecedented increase of 18.75 percent in capital outlay, over the last year, and 30 percent over the year before, which is the highest in the last 15 years. “Apart from defense pensions, the budget witnessed an increase of Rs 24,792.62 crore over the financial year 2020-21,” he added.
Speaking of the COVID-19 situation, Singh stated that it had brought a stop to the economic growth in the industrial sector. He highlighted that the impact was felt more by small and medium-sized companies (MSMEs). Appreciating the initiatives undertaken by Prime Minister Narendra Modi, he added that PM Modi had provided a support system to the affected sectors. “We chose to continue with our policy of accelerating economic growth and creating job opportunities in this year’s budget. We aimed to not only bring the economy back on its positive trajectory but also seek opportunities as a result of this challenge,” he said.
He informed that the Ministry of Defence has set a target to achieve a turnover of Rs 1,75,000 Crores (US$ 25 Bn) including export of Rs. 35,000 Crores (US$ 5 Bn) in Aerospace and Defence goods and services by the year 2024. Reportedly, the nation has decided to spend 130 billion dollars on military modernization in the next 5 years. As per sources, he added that around 83 indigenously designed and developed LCA MK1A worth Rs. 48000 Crore have been awarded to HAL. The contract is said to be signed soon.
Furthermore, the Ministry has taken several steps for the bifurcation of capital procurement budget into domestic and foreign capital procurement routes. “The Ministry has planned to invest, about 63% of the outlay for 2021-22 on domestic procurement,” he informed. He also mentioned that the Industrial License process has been simplified.
“To widen the investment base, the Government of India has enhanced FDI in Defence Sector up to 74 percent under Automatic Route and 100 percent under Government route,” Singh said. He mentioned that it would act as a catalyst for foreign players to invest in India.
Under the latest Public Procurement Order 2017, the Government has notified 46 items. The procurement of these items shall be done from local suppliers only, irrespective of the purchase value. Meanwhile, the Offset policy has been revised in 2020, with the thrust on attracting FDI and Transfer of Technology for Defence manufacturing. He informed that higher multipliers have been assigned to offset discharge in case of the development of MSMEs.