Contrary to expectations, there was no big announcement for the defence sector in Union Budget 2023-24. While the Ministry of Defence has received the highest allocation among all ministries at Rs 5.94 lakh crore, it is not a significant jump from Rs 5.25 lakh crore for this FY.
Shares of Bharat Electronics, Bharat Dynamics, Hindustan Aeronautics, Paras Defence and BEML tumbled 5-9 percent after Finance Minister Nirmala Sitharaman completed her Budget speech.
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Under its ambitious Atmanirbhar Bharat scheme, the government has banned imports of several items, including crucial parts used in defence equipment. Which means they are being manufactured in India now.
The government has set a target of Rs 1.75 lakh crore worth of defence production by 2025.
Thus, market participants were hoping for more big bang announcements in this Budget. “We expect a higher capex in defence,” Axis Securities had said in its pre-Budget expectations report.
Analysts were also hoping for a boost for more firepower, submarines, drones and combat aircraft.
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