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Friday, 3 February 2023

Defence Budget 2023: A move towards Atmanirbharta and improving security environment...... Read more at: https://organiser.org/2023/02/03/107054/bharat/defence-budget-2023-a-move-towards-atmanirbharta-and-improving-security-environment/

https://organiser.org/2023/02/03/107054/bharat/defence-budget-2023-a-move-towards-atmanirbharta-and-improving-security-environment/ 

The Defence Ministry has been allotted Rs 5.93 lakh crore, up from Rs 5.25 lakh crore in the 2022-23 budget. There is a 12.95 per cent hike in the total Budget compared to last year’s revised estimate...

Defence Budget Move Towards Atma Nirbharta And Improving Security Environment

The defence ministry has been allotted at ₹5.93 lakh crore, up from ₹5.25 lakh crore in the 2022-23 budget. There is  12.95% hike in the total budget  compared to last years revised estimate’s(money that was actually spent)

Capital expenditure increased but not adequate

A total of Rs 1.62 lakh crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware, The capital outlay has  been hiked to ₹1.62 lakh crore, a ₹10,000 crore hike from last time. The armed forces have not been able to spend the full amount of ₹1.52 lakh crore allotted in the last budget. This is because of the air force surrendering ₹1,837 crore as per the revised estimates.

The relatively small hike in capital expenditure has resulted in disappointment for the industry. "Capex for defence gets a nominal increase of 7% vs 33% increase in the nation's overall capital expenditure commitment. This capex allocation misses on the government's impetus on defence manufacturing.

The government also increased the capital budget of Border Roads Organisation by 43% to ₹5,000 crore against ₹3,500 crore in FY23.The increase will boost border infrastructure and assist in implementing projects like the Sela Tunnel, Nechipu Tunnel and Sela-Chhabrela Tunnel, Which will improve defensive preparedness and capability to move troops from the rear areas into forward areas on the Indo China border.

Capital expenditure in the defence sector is crucial for India’s aim to become self-reliant in defence manufacturing and to meet a rising challenge from China and Pakistan by creating infrastructure and adopting modern technology. The government, in the last few years, has encouraged domestic manufacturing while reducing exports under the defence ecosystem of India. The exports in the sector surged nearly eight times to Rs 12,815 crore in 2021-22 from Rs 1,521 crore in 2016-17.

PLI scheme in helping in self sufficiency

In September 2022, the government had introduced the PLI scheme in order to spur manufacturing of drones and drone components in India. The defence ministry had, in December last year, approved the procurement of arms worth over Rs 84,300 crore to boost the combat capabilities of the defence forces. This amount included approval for six capital acquisitions for the Indian Army, 10 for the Indian Navy, six for Indian Air Force, and two for Indian Coast Guard.

Revenue Expenditure increases

The increase in the budget is  mostly on account of a peak in revenue expenditure (₹2.7 lakh crore) projected for the financial year.

Allocation of Rs 2,70,120 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments. The budgetary allocation of revenue expenditure in 2022-23 was Rs 2,39,000 crore. "The allocation under this segment has doubled in two years since FY 2021-22.

This will cater to sustenance of Weapon Systems, Platforms including Ships/Aircrafts & their logistics; boost fleet serviceability; emergency procurement of critical ammunition and spares; procuring/hiring of niche capabilities to mitigate capability gaps wherever required; progress stocking of military reserves, strengthening forward defences, amongst others.

The enhanced allocations in the Budget will also cater to Training Aids & Simulators for Agniveers and ensure that they achieve the set standards of training for induction in the Defence Forces.

The revenue expenditure has increased drastically due to constant deployment of 50- 60000 troops on the Indo China border to meet various contingencies of intrusion by the Chinese. In addition the troops have to be rotated at regular intervals. This results in an increase in revenue expenditure which possibly cannot be avoided.


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