Decoding Indian Defence Budget 2022-23

Finance Minister Nirmala Sitharaman on Tuesday announced several measures to promote ‘Atmanirbharta’ in the defence sector and reduce dependence on imports of defence equipment.

• Overall Indian defence budget for FY 22-23 is Rs 5,25,166 crore. 9% hike from the last year’s budgetary allocation of Rs 4,78,196 crore. Out of which Rs 1.52 lakh crore for defence capital outlay, 12% higher than previous year.

• Along with that 68% capital expenditure for indigenous weapons purcahses compared to 63 (58) last year. 25% of R&D budget for start ups and private domestic industry.

• A massive jump of around 43 per cent in the modernisation funds of the Indian Navy in the defence budget for 2022-23 at Rs 47,590.99 crore.

• The Indian Air Force retained the biggest share of the forces’ capital budget at Rs 56,851.55 crore–an increase of just about 4.5 per cent from the previous financial year.

• The Indian Army’s capital budget went down by 12.2 per cent to Rs 32,102 crore, from Rs 36,481.90 crore in the last fiscal.

• Private sector will be encouraged to take up the design and development of military platforms and equipment in coordination with Defence Research and Development Organisation (DRDO) and other organisations under the SPV model.

In her Budget 2022-23 speech, the minister said that 68 per cent of capital for the defence sector would be allocated to the domestic industry in 2022-23. That’s a significant increase from 58 per cent the previous fiscal year, according to the FM.

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“Our Government is committed to reducing imports and promoting Atmanirbharta in equipment for the Armed Forces. 68 per cent of the capital procurement budget will be earmarked for the domestic industry in 2022-23, up from 58 per cent in 2021-22,” said Sitharaman.

To boost #AatmanirBharta & reduce reliance on imports of defence eqpt, 68% of capital procurement budget for defence earmarked for domestic industry. Up from 58% of previous fiscal yr

Defence R&D opened up for industry and startups.@nsitharaman #AatmaNirbharBharatKaBudget pic.twitter.com/kvmOKgCgrQ

— PIB India (@PIB_India) February 1, 2022

She added that the private sector will be encouraged to take up the design and development of military platforms and equipment in coordination with Defence Research and Development Organisation (DRDO) and other organisations under the SPV model.

Industry, start-ups and academia will be encouraged to participate in defence R&D, with 25 per cent of the R&D budget reserved for them.

An independent nodal umbrella body will be established for certification and other requirements.