Make in India - Energetic Political Drive for Development and Integration of Indigenous Fighters

 Prime Minister Modi's recent journey aboard the twin-seat variant of the Tejas Light Combat Aircraft underscores the vigorous political commitment to developing and integrating indigenous fighters. The Tejas, in its various versions, is poised to take center stage in the air force, replacing aging jets such as the MiG-21. While the initial years of Tejas development faced technical challenges and a lukewarm reception in the Indian Air Force (IAF), the landscape changed with China emerging as India's primary strategic adversary and the disruption caused by the Ukraine war to foreign defense supply chains.

As one of the world's largest defense importers, India confronts the triple challenge of ensuring advanced combat capabilities, establishing resilient supply chains impervious to external geopolitical disruptions, and addressing China's escalating assertiveness. This is precisely where the Tejas assumes paramount importance. With the air force currently operating at 31 squadrons, falling short of the required 42 to effectively counter the combined China-Pakistan challenge, the urgency for accelerated Tejas production becomes evident. Presently, the production rate stands at a sluggish eight fighters per year. Of the initial order for 40 Tejas Mark-1 jets, scheduled for completion by December 2016, only 32 single-seat fighters and two of the eight twin-seat trainers have been delivered thus far.

Additionally, another 83 Tejas Mark-1A jets are in the pipeline for delivery by 2028, alongside 97 Tejas Mark-1A fighters awaiting acquisition approval. Furthermore, the development of the advanced Tejas Mark-2, boasting enhanced range and weapons payload, is underway, featuring the American GE-414 engine with an 80% transfer of technology to be manufactured in India.

The challenge with Tejas now lies not in securing advanced orders but in significantly enhancing Hindustan Aeronautics Limited's (HAL) production rate to meet targets and safeguard the air force's combat capabilities. Another crucial aspect for Indian defense manufacturing to address is safety and servicing. Malaysia's recent preference for the South Korean FA-50 over the Tejas for its air force was influenced by HAL's lackluster safety record, particularly in the context of accidents involving the Advanced Light Helicopter exported to Ecuador. With the Tejas poised to be the air force's mainstay, there is an optimistic outlook that quality and spare parts will meet required standards, instilling confidence among potential foreign buyers.

Economic Security-

Fastest Growing Economy In The World

India's GDP growth rate for the July-September quarter soared to 7.6%, surpassing the RBI's projection of 6.5%. Notable highlights include a 13.9% surge in manufacturing to Rs 7.15 lakh crore, a 13% increase in construction to Rs 3.04 lakh crore, and an 11% rise in investments to Rs 14.71 lakh crore. Despite these gains, the distribution of income saw private consumption growing by only 3.1% to Rs 23.7 lakh crore.

A significant milestone was achieved as the value of shares listed on the stock market reached $4 trillion, making India the fourth country globally to attain this valuation level. This represents over 100% of the GDP, a crucial metric indicating a profound economic transformation. Notably, the US, with its dynamic technology sector, has consistently maintained a market capitalization-GDP ratio exceeding 100% since 1996. India's current ratio reflects favorable macroeconomic indicators supporting the profit growth of listed firms, evidenced by a remarkable 20% growth in corporate tax between April and September 2023, outpacing the 8.6% nominal GDP growth for the same period.

Robust tax collections are attributed to two key factors. Firstly, the composition of India's fiscal allocations has been restructured to support economic growth at all government levels, with a reduction in the share of revenue deficit in fiscal deficit over the last three years. This shift indicates a higher proportion of borrowing directed towards investments. Secondly, the capital expenditure of major states witnessed a substantial 47% increase in the first half of 2023-24.

The positive macroeconomic landscape is complemented by a noteworthy change in the composition of household savings. Over the past three years, there has been a surge in mutual fund investments, with 2021-22 marking a structural shift. Flows into mutual funds that year escalated by 2.5 times to Rs 1.6 lakh crore, with a subsequent 12% growth in the following year. The $4 trillion market capitalization and the impressive 7.6% growth rate are, therefore, underpinned by a solid foundation. The high Q2 GDP growth, $4 trillion market capitalization, and the shift in household savings towards mutual funds signify profound and far-reaching economic changes.