Sansad TV Perspective: Budget 2022-23: Self-Reliant in Defense

In the series Sansad TV Perspective, we bring you an analysis of the discussion featured on the insightful programme ‘Perspective’ on Sansad TV, on various important topics affecting India and also the world. This analysis will help you immensely for the IAS exam, especially the mains exam, where a well-rounded understanding of topics is a prerequisite for writing answers that fetch good marks.

In this article, we feature the discussion on the topic: Budget 2022-23: Self-Reliant in Defense

Anchor: Vishal Dahiya

Participants:

1. Sunil K. Misra, Director General, Society of Indian Defence Manufacturers 
2. Maj Gen (Retd.) Dhruv C. Katoch, Director, India Foundation 
3. Sachin Agarwal, CMD, PTC Industries

Context:

The budget 2022-23 brings about new proposals including the opening up of Defense Research & Development. The article will analyze the different aspects of the budget for the defense sector.

Background:

• Ministry of Defence has been allocated a total budget of Rs 5.25 lakh crore for Financial Year 2022-23 with a focus on modernization of Defence Services and Defence Security Infrastructure development including the Border Road Infrastructure and Coastal Security Infrastructure. 
• The total allocation under Capital Outlay of the Defence Services has been increased from Rs 86,740 crore in 2013-14 to 1.52 lakh crore in 2022-23. 
• It is proposed that 68 percent of the capital procurement budget will be earmarked for the domestic industry in 2022-23, up from 58 percent in the previous year indicating Government’s commitment to reducing imports and promoting AtmaNirbharta in equipment for the Armed Forces. 
• While Defence R&D will be opened up for industry, startups, and academia, the private industry will also be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organizations through the Special Purpose Vehicle (SPV) model. 
• We will discuss and analyze how will this budgetary allocation lead to India becoming self-reliant in the Defence sector and what more needs to be done. 

Why is self-reliance needed?

• Self-reliance in defense is critical for any country. If our borders are safe, and our defense forces are equipped with indigenous equipment then it will provide a sense of assurance that the weapons will be available when they are required and the country is safe.
• This will also lead to the creation of jobs in the country.

Public-Private Partnership:

• There are three players in the defense market, namely, the manufacturers, the users, and the administrators. 
• Earlier, there was a lack of synergy among these three players. But, in the recent past, synergy has been built up by all three and there is much more to do to strengthen this synergy.
• India does not have the defense infrastructure outside the public sector and it was very difficult for the private players to come in because the investments are generally very high and there is no guarantee that after putting a huge amount of money whether the products will be taken by the users.
• The policies that are coming into effect are going to give the private players a level playing field.
• It is not possible for the public sector to fulfill 100 percent manufacturing requirements of the defense sector. Hence, a strong public-private partnership is required.

Budget takeaways for the defense sector:

• The government is committed to reducing imports and promoting ‘Atmanirbharta’ (self-reliance) in equipment for the armed forces and 68 percent of the capital procurement budget will be earmarked for the domestic industry in 2022-23.
• The private industry will be encouraged to take up the design and development of military platforms and equipment “in collaboration with DRDO and other organizations” by creating Special Purpose Vehicles.
• 25 percent of the R&D Budget for start-ups and private entities will be reserved.

Advantages:

• It is very necessary to develop our own products so that other related industries can also develop. Tejas Aircraft is one of the products of India. It has opened up opportunities for the aviation industry. Hence, self-reliance will also increase opportunities and reliability.
• India has talent and the country only requires the best policies to use the talent to their full potential. Because, in the near future, wars will be digitalized and for that, there should be well-developed infrastructure.
• Indian industry is very capable of manufacturing and notably, the exports of defense equipment have also increased.

Conclusion:

In the whole spectrum of small industries, startups, large industries, and our public sector undertakings (PSUs), there is a huge amount of enthusiasm because the defense manufacturing sector is an emerging sector and it holds a lot of opportunities that require efficient policies and successful implementation.

Read more summaries of Perspective in the link.

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