Budget 2023: What Defence Manufacturing Industry Expects
NDTV
The government is expected to earmark a significant portion of the budget for boosting defence and continue its push for indigenization.
The Union Budget 2023-24 will be presented by Finance Minister Nirmala Sitharaman on February 1. The defence manufacturing sector is hoping that schemes and policy decisions announced by the minister will boost the output of the industry.
In the past few years, the central government has reduced imports while encouraging manufacturing in 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% percent in 2019-20 to 36% in 2020-21.
The government had allocated Rs 5.25 lakh crore for the sector in the Union Budget 2022-23. Domestic capital procurement accounted for 64% of the Defense Services Capital Acquisition Budget 2021-22. This was increased to 68% in the next financial year.
The Budget should encourage procurement from start-ups in the defence sector that have innovative products, according to industry insiders. Tax sops and GST waivers will encourage the industry to invest further in innovation in the defence manufacturing sector, they added. The defence manufacturing sector expects that fast-tracking of procurements will boost the growth of the industry in India.
