The Union Budget 2023-24 might be introduced by Finance Minister Nirmala Sitharaman on February 1. The defence manufacturing sector is hoping that schemes and coverage choices introduced by the minister will enhance the output of the trade.
In the previous few years, the central authorities has diminished imports whereas encouraging manufacturing within the defence sector. India’s defence exports have grown eightfold, from Rs 1,521 crore in 2016-17 to Rs 12,815 crore in 2021-22. The capital expenditure on imports by armed forces went down from 41.89% p.c in 2019-20 to 36% in 2020-21.
The authorities had allotted Rs 5.25 lakh crore for the sector within the Union Budget 2022-23. Domestic capital procurement accounted for 64% of the Defense Services Capital Acquisition Budget 2021-22. This was elevated to 68% within the subsequent monetary yr.
The Budget ought to encourage procurement from start-ups within the defence sector which have progressive merchandise, based on trade insiders. Tax sops and GST waivers will encourage the trade to take a position additional in innovation within the defence manufacturing sector, they added. The defence manufacturing sector expects that fast-tracking of procurements will enhance the expansion of the trade in India.
In December final yr, the Defence Ministry authorised the procurement of arms price Rs 84,328 crore to spice up the fight capabilities of the defence forces. These included approval for six capital acquisitions for the Indian Army, 10 for Indian Navy, six for Indian Air Force, and two for Indian Coast Guard.
The authorities has additionally arrange two Defence Industrial Corridors (DICs), one in Uttar Pradesh and one in Tamil Nadu. These have been established to draw funding of as much as Rs 10,000 crore in every hall. Emphasis has additionally been given on selling exports and liberalisation of international investments. So far, 4 Positive Indigenisation Lists have been launched by the Ministry of Defence. The listing consists of assorted defence tools that might be manufactured domestically.
The authorities has additionally launched Production Linked Incentive (PLI) schemes in 14 sectors, with a complete funding of Rs 1.97 lakh crore. The scheme is aimed toward boosting home manufacturing, investments, and exports. In September 2021, the scheme was prolonged to the manufacturing of drones and drone parts.
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