Defence Budget 2022: Here's everything you need to know in relation to the Defence sector

This year, the Government has enhanced the total Budget for the Defence sector by Rs 46,970 crore. The overall Budget for Defence has been increased to Rs 5,25,166 crore this year from the last year’s Budget of Rs 4,78,196. This Budget also includes pensions. The Capital Outlay on Defence Services in this Budget is Rs 1,52,369.61 crore while Defence Pensions have been allocated Rs 1,19,696.00 crore.

Defence Revenue Budget increased marginally this year to Rs 2.39 lakh crore from Rs 2.33 lakh crore last year. In terms of the distribution of the capital share of Defence Budget between the three arms, Army gets Rs 32,015 crore, the Navy gets Rs 47,590 crore while the largest chunk of Rs 55,586 crore goes to the Air Force.

The Budget for Research & Development (R&D) in Defence is Rs 11,981 crore. Reiterating the government’s commitment to reduce imports and promote AtmaNirbharta in equipment for the Armed Forces, the Union Budget presented in parliament today, February 1, by Union Finance & Corporate Affairs Minister Nirmala Sitharaman, has earmarked 68 per cent of the capital procurement budget for the domestic industry in 2022-23, up from 58 per cent in 2021-22.

Union Finance Minister said that Defence R&D will be opened up for industry, startups and academia with 25 per cent of Defence R&D Budget earmarked. Private industry will be encouraged to take up the design and development of military platforms and equipment in collaboration with DRDO and other organisations through the SPV model. She emphasised that an independent nodal umbrella body will be set up for meeting wide-ranging testing and certification requirements.

Some major reactions

Defence Minister Rajnath Singh reacted on Twitter and said, "The 68 per cent 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."

DRDO has welcomed the Budget for Defence forces. It took to twitter and said, "Budget 2022 has given a boost to industry for design and development of major defence systems through SPVs. DRDO will work vigorously with industry to give a quantum jump to self-reliance in defence."

The indigenous defence industry has also welcomed the Union Budget with its reforms in the sector. Vice Admiral Paras Nath (Retd.) AVSM, VSM Group President, Crown Group of companies (Defence Engineering Division) has welcomed the Budget. Hailing the Union Budget 2022, Vice Adm Paras Nath (Retd.), Group President of Crown Group Defence said, “It is heartening to see that part of the R&D budget has been allocated to the industry, Start-ups and academia. This will be a positive move, in particular, to startups and MSMEs to have their inhouse R&D.”

Image: ANI, PTI