The defense budget of India for the fiscal year 2019-20 will cross 3 lakh crore rupees. “Our soldiers are our pride and honour. Our defense budget for the first time has increased to Rs 3 lakh crore and additional funds will be provided. Infrastructure is the backbone of any development. Over 100 operation airports in the country and domestic passenger traffic has doubled in last five years,” says Piyush Goyal. This is for the first time in India’s history that defense budget of the country crossed 3 lakh crore rupees. In the Union Budget 2017-18 the then finance minister Arun Jaitley, who is currently in the USA for medical treatment, had allocated Rs 2,95,511.41 crore for Defence, accounting for 12.10 per cent of the total Central Government expenditure for the year 2018-19. The government has already disbursed the amount of Rs 35,000 crore rupees for the One Rank One Pension, as promised in the Bharatiya Janata Party (BJP) election manifesto for the 2014 Lok Sabha election.
The interesting fact is that the defense budget of India is more than the total budget of Pakistan. The total budget of Pakistan for the year 2018-19 was 4.75 lakh crore Pakistan rupees or 2.41 lakh crore in India rupees. Therefore the defense of India is almost 20 percent higher than the total budget of Pakistan. Despite all the rants of Pakistan armed forces, the fact is that Pakistan does not have financial resources to compete with India. Pakistan is poor country, failed country and ruled by few elite families who control the resources and therefore the economy is still stuck in ‘feudal age’.
India’s defense industry is growing at an unparalleled pace under the Modi government. The government introduced many policy announcements to boost the Make in India in the defense industry. In a bid to change the status quo, the government introduced a new defense procure meant policy (DPP) which was effective from 2016 and increased the Foreign Direct Investment in defense. As soon as the Modi government was sworn in, the FDI in the defense industry was increased to 49% from 26%. However, the FDI in 2015-16 was just about INR 56 lakh thereby forcing the government to act allowing FDI up to 100% in some cases where the country would witness the latest technology transfer. Under the brand new DDP, a product will be required to have at least 40% indigenous content if it is designed in India or at least 60% indigenous content if the design is not indigenous, making it the most preferred category.
India had the ignominy of having Defence Ministers like Mulayam Singh Yadav in the past who are best known for their caste-based politics and their only ideology is corruption. In an attempt to not let the day to day dealings of the Army to lie on the whims of a Minister, Department of Industrial Policy and Promotion(DIPP) is constituted to exclusively issue licenses making it the final authority to issue licenses and not the Defence Minister.
After Nirmala Sitharaman took over as the Defence Minister from Manohar Parrikar, she is hell-bent on eradicating the bureaucratic delays is working on a proposal under which if a license remains pending over two months or after it’s due date for approval has elapsed, it will be “deemed approved” under certain cases. As of now, the ministry is working on the modalities of the proposal. Simultaneously the government is also working on tax concessions for domestic manufacturers and is als0 exploring the feasibility of making commercial the technologies developed by the Defence Research and Development Organisation (DRDO) and bring in much-needed funds through it.