Budget 2022| Defence R&D takes a big stride for the first time

Budget 2022 talks of an independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements. (Photo by Yogendra Singh from Pexels)

Despite the relatively minor hike in defence allocation to Rs 5.25 lakh crore for 2022-23 from Rs 4.78 lakh crore last year, the government appeared to be committed to its stated intent: reduce imports and promote Atmanibharta or self-reliance in manufacturing of defence equipment.

``Our Government is committed to reducing imports and promoting Atmanirbharta in equipment for the armed forces,’’ finance minister Nirmala Sitharaman said, in her Budget 2022 speech.

About 68 per cent of the capital procurement budget will be earmarked for domestic industry in 2022-23, up from 58 per cent in 2021-22.

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Significantly, defence research and development (R&D) will be opened up for participation from industry, start-ups and academia with 25 per cent of defence budget earmarked to enable this. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with the Defence Research and Development Organisation (DRDO) and other organisations through SPV model.

An independent nodal umbrella body will be set up for meeting wide ranging testing and certification requirements.

Says Lt General Satish Dua (Retd), a former Corps Commander in Kashmir, who retired as Chief of Integrated Defence Staff: ``While the increase in defence allocation is nothing to write home about, fixing a definite allocation of 25 percent to go to the private sector for R&D is a big move for the first time. People have talked about it in the past, but for the first time, a figure has been earmarked.”

The overall defence budget of Rs 5.25 lakh crore, including Rs 1.2 lakh crore for defence pensions, is an increase of 9.8 percent over last year's total outlay. The defence budget excluding the pension component stands at Rs 4.05 lakh crore.

In the defence budget, the finance minister allocated Rs 1.52 lakh crore for capital expenditure in 2022-23, which includes purchasing weapons and military hardware. This is an increase of around 10 percent over the revised estimate of Rs 1,38,850 crore for 2021-22.

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An allocation of Rs 2.33 lakh crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments, according to the budget documents.

For the Ministry of Defence (civil), the government has set aside Rs 20,100 crore.

The bigger problem, according to brig Rajiv Williams (Retd), is to put procedures in order. ``Close to 40 percent of the defence outlay has not been used,” he told Moneycontrol.

Under the capital outlay plan, the Army has been given Rs 32,015 crore as against Rs 36,481 crore in the budget last year. The Army could spend only Rs 25,377 crore out of the allocation.

The Indian navy has been given an allocation of Rs 47,590 crore under capital outlay as against last year's budgetary outlay of Rs 33,253 crore.

The Indian Air Force has been allocated a total of Rs 55,586 crore as the capital outlay as against last year's Rs 53,214 crore. The IAF could spend Rs 51,830 crore out of the allocation.

As the private industry begins to participate in the design and development of military platforms and equipment, what will be the role of DRDO?

DRDO was mainly responsible for research in the defence sector until now.

To this, a senior defence ministry official said that for everyone in the sector, it would be a collaborative effort.