Defence allocation gone up from Rs 80,959.08 cr in 2019-20 to Rs 1,32,301.27 cr in 2023-24: Govt

There is "no meagre allocation" of resources for defence modernisation, and allocation for it under total capital outlay for defence services has gone up from Rs 80,959.08 crore in financial year 2019-20 to Rs 1,32,301.27 crore in 2023-24, the government informed the Parliament on Friday, August 11.

Minister of State for Defence Ajay Bhatt said this in response to a query in Lok Sabha. The minister shared data on the "projected and allocated funds under Capital Acquisition (Modernisation Budget) in BE 2023-24".

"There is no meagre allocation of resources for defence modernisation and allocation for modernisation under total Capital Outlay for defence services has gone up from Rs 80,959.08 crore in FY 2019-20 to Rs 1,32,301.27 crore in FY 2023-24," he said in his response.

The allocated funds are optimally utilised towards operational activities. If required, the schemes are reprioritised to ensure that urgent and critical capabilities are acquired without any compromise to operational preparedness of the defence services, he added.

Also, with a view to encourage indigenous industry to contribute to defence modernisation, funds for financial year 2023-24 have been earmarked in the ratio of 75:25, where 75 per cent (Rs 99,223.03 crore) is for domestic procurement and 25 per cent (Rs 33,078.24 crore) is for foreign procurement, the minister added.

Further, the government has taken several policy initiatives in the past few years and brought in reforms to encourage indigenous design, development and manufacture of defence equipment, thereby promoting self-reliance in defence manufacturing and technology in the country. These initiatives, inter alia, include according priority to procurement of capital items from domestic sources under the Defence Acquisition Procedure (DAP)-2020, he said.

In a separate query, he was also asked "whether the government is procuring things/items for the armed forces and establishments in defence from Micro, Small and Medium Enterprises (MSME) with a view to promote the MSME sector in the country", to which he replied in the affirmative.

"Capital procurement of defence equipment is carried out as per the Defence Acquisition Procedure (DAP 2020) with a focus on 'Atmanirbhar Bharat' where indigenisation, innovation and import substitution have been facilitated through various schemes to build a robust ecosystem based on domestic industry, including MSME. One of the key objectives of Make in India initiative of the government is to bring MSMEs and start-ups into the defence supply chain and thereby boost self-reliance," the minister said.

On the purchases or acquisitions made for armed forces and establishments in defence during the last five years, year-wise, he said "during the last five financial years (2018-19 to 2022-23), 239 capital acquisition contracts have been signed for procurement of defence items/equipment. Out of which, 168 contracts accounting for 68 per cent of total contracts value have been signed with Indian vendors, including MSMEs."

In response to another query, he said the government has approved TDF (Technology Development Fund) scheme to "encourage participation of public/private industries, especially MSMEs and start-ups, to design and develop various defence technologies indigenously". A total of 41 MSMEs and 20 start-ups have been supported under the TDF Scheme, he added.

Responding to another query, the minister said, "In consonance with the Government of India initiative to promote Indian millets during the ‘International Year of Millets–2023’, government sanction was accorded on May 26 for issue of millets flour (Bajra/Jowar/Ragi in the ratio of 10:10:5, respectively) up to 25 per cent of atta/rice authorised in the existing scales of ration to all categories of personnel dependent on Army Service Corps for drawal of rations during the current financial year".