Context:
India’s defence budget has witnessed a significant double-digit increase, emphasizing modernization, domestic defence production, and strategic preparedness. However, bureaucratic delays, fragmented R&D, and procurement inefficiencies continue to hinder optimal outcomes.
Key Highlights:
Budget Allocation
• The defence budget has reached around 2% of GDP, reflecting increased strategic priority.
• Capital expenditure increased by more than 22%, surpassing revenue expenditure.
• This shift indicates a focus on modernization and equipment acquisition.
Service-wise Allocation
• Indian Air Force receives about 32% increase to strengthen aircraft fleet and capabilities.
• Indian Army gets about 30% increase for heavy vehicles, artillery, and weapons systems.
Indigenisation and Domestic Industry
• 75% of the capital acquisition budget is earmarked for domestic industries, including private sector participation.
• Policy aims to promote Atmanirbhar Bharat in defence manufacturing.
Defence Exports Growth
• Defence exports reached around ₹23,000 crore recently, compared to ₹1,000 crore in 2014.
• India is emerging as a defence manufacturing hub.
Structural Challenges
• Bureaucratic procurement delays affect modernization timelines.
• Major projects such as Project-75 submarine program and the Rafale fighter aircraft deal experienced delays.
• Defence Research and Development (R&D) remains fragmented and heavily dependent on government agencies.
Policy Proposals
• Proposal for a Non-Lapsable Defence Modernisation Fund to ensure stable long-term financing.
• Greater private sector participation in defence R&D.
Significance
• Enhances national security preparedness amid global instability.
• Boosts domestic defence manufacturing ecosystem.
• Generates employment, innovation, and industrial growth.
Relevant Prelims Points:
- Capital Expenditure
- Spending on acquisition or upgrading of physical assets such as aircraft, tanks, ships, and infrastructure.
- Indigenisation in Defence
- Policy to develop and manufacture defence equipment domestically.
- Non-Lapsable Fund
- A fund where unused allocations remain available for future years instead of returning to the treasury.
- Project-75
- Program for construction of advanced submarines for the Indian Navy.
- Defence Export Policy
- Aims to position India among major global defence exporters.
Relevant Mains Points:
- Importance of Defence Spending
- Ensures military preparedness and technological superiority.
- Strengthens India’s strategic autonomy.
- Supports defence industrial ecosystem and economic growth.
- Challenges in Defence Procurement
- Complex procurement procedures.
- Delays in project execution.
- Dependence on foreign technology.
- R&D Issues
- Limited private sector participation.
- Fragmentation between DRDO, public sector units, and private companies.
- Economic Impact
- Defence sector can act as a growth multiplier through technology spillovers.
- Encourages innovation, manufacturing, and exports.
- Way Forward
- Simplify defence procurement processes.
- Promote public-private partnerships in R&D.
- Establish long-term funding mechanisms like Non-Lapsable Modernisation Fund.
- Strengthen export promotion and global defence partnerships.
UPSC Relevance:
• Prelims: Defence procurement, capital expenditure, indigenisation.
• Mains: GS-III (defence modernization, national security, industrial policy).