As a part of the Union Budget 2022, Nirmala Sitharaman announced that the overall budgetary allocation for the defense is 52,5166.15 crore, which is a 10% increase from the previous year’s allocation, while the inflation is touching 6%. Along with this, she also stated that the Indian defense will be looking at a more Aatmanirbhar (self-sufficient) approach by opening up research and development for the military to private players. 68 percent of the capital budget is being earmarked for domestic industries instead of the R&D being limited primarily to the Defence Research & Development Organisation (DRDO).
There are several benefits that this move will bring to the table. Starting with a reduction in the fiscal deficit of the nation. This is due to the Indian military depending heavily on imports such as the Naval MiG29k from Russia or the French Rafale. These deals tend to be very expensive and also reduce the country’s self-sufficiency. Indigenous production of equipment is likely to significantly reduce the spending of the country and will counter the fiscal deficit along with reducing the defence budget in the future, which has been a point of contention with the Indian public.
"Congratulations to Finance Minister, Smt @nsitharaman on presenting an excellent Union Budget for 2022-23. It is a Budget which would give fillip to 'Make in India', boost demand and build capacities for a stronger, prosperous and confident India," The defence minister, Rajnath Singh tweeted, responding to the decisions made by the budget committee regarding the defence budget.
“Most developed countries manufacture a majority of their military equipment. For India to become a superpower one day, this shift to indigenous development is necessary,” says Commodore Biplab Hota, a fighter pilot in the Indian Navy.
At the moment, the country is working on the Indian Naval Ship (INS) Vikrant, named after India’s first aircraft carrier also called Indigenous Aircraft Carrier (IAC-1). The ship is under construction in the Cochin Shipyard Limited. The cost of building IAC-1 has been estimated to be around Rs 19,500 crore. The manufacturing of this carrier has built an ecosystem of 550 firms, including 10 MSMEs.
This leads to the added advantage of indigenous production, which is the increase in job opportunities within the country, by Indian companies. Thus boosting the Indian economy. Increased funding for R&D within the country will also lead to the Indian manufacturers getting the opportunity to experiment and learn more in order to work out the kinks with the pre-existing Indian models, such as the Air Force’s Tejas, manufactured by Hindustan Aeronautics Limited.
However, even though the choice made by the government reserve over a majority of the funds for Indian manufacturing is laudable in intent, there are several drawbacks that the Indian Military will be forced to bear the brunt of. There is an implication brought out by the previous paragraph that there are several improvements required by Indian manufacturers to make to their models. The Indian Military can choose them only after the aforementioned is done in order to assure quality growth of the standards of the tri-services and paramilitary forces. Hence, this ‘forcible’ shift towards Indian production also has the disadvantage of the production of sub-par equipment at a time when there is increased sophistication in military procurement around the world. Moreover, India’s clash with China in the northern border calls for the procurement of vessels and equipment that are better suited to combat China’s developments in the defence front.
“The decision has been made keeping the country’s long term future in mind. About 1/3rd of the budget has been allocated for the procurement of defence equipment from other countries, which is a good amount as it allows for us to upgrade our forces whilst ensuring that the Indian manufacturers are being allowed a chance to improve the standard of equipment delivered by them,” adds Cmde Hota.
However, this leads to the military facing a paradox currently, especially with the deteriorating relations with China. They have to maintain the standards of their equipment for the sake of national security. Sending soldiers to the border without proper equipment would be a suicide mission. However, if the procurement in the near future has to be made from Indian manufacturers, whose equipment might be sub-par compared to the likes of the manufacturers abroad, the ideal standard of the military cannot be met.