Nirmala Sitharaman allocates Rs 5.25 lakh crore for defence in Budget

India's defence budget has been increased to Rs 5.25 lakh crore for the next fiscal from last year's allocation of Rs 4.78 lakh crore. Announcing the defence allocation in her Budget speech, Finance Minister Nirmala Sitharaman today said the government is committed to reducing imports and promoting self-reliance in defence manufacturing.

Out of 5.25 lakh crore, a total of Rs 1,52,369 crore has been set aside for capital expenditure that includes purchasing new arms, fighter jets, warships and other military equipments, Sitharaman said. The budget allocation for capital outlay was Rs 1,35,060 crore for the current fiscal but the revised estimate showed the expenditure at Rs 1,38,850 crore.

For the next fiscal, Rs 2,33,000 crore has been kept for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments.


Separately, an amount of Rs 1,19,696 crore has been allocated for defence pensions while Rs 20,100 crore has been set aside for the Ministry of Defence (Civil).

Defence Minister Rajnath Singh described as an "excellent move" the proposal in the Union Budget to set aside 25 per cent of the defence R&D budget for start-ups and private entities in the financial year 2022-23.
Singh also welcomed Sitharaman's announcement that 68 per cent of the defence capital procurement budget would be allocated towards procurement from domestic industry.

"The 68 percent of defence capital procurement budget has been allocated towards local procurement. It is in line with the 'Vocal for Local' push and it will certainly boost the domestic defence industries," Singh tweeted.

He said substantial amounts have been allocated towards research and development in several sectors including defence.
"The proposal to reserve 25 per cent of the R&D Budget for Startups and Private entities is an excellent move," the defence minister said.

In her budget speech in Parliament, Sitharaman said the government is committed to reducing imports and promoting self-reliance in producing equipment for the armed forces.

"Sixty-eight per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22," she said.

The finance minister said defence research and development will be opened up for industry, start-ups and academia with 25 per cent of defence R&D budget earmarked for it.

"Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organisations through SPV (special purpose vehicle) model," she said.

Sitharaman said an independent nodal umbrella body will be set up for meeting wide-ranging testing and certification requirements.

(Inputs from PTI)