New Delhi: Finance Minister Arun Jaitley on Thursday announced just an additional Rs 5000 crore for the Defence Budge, taking the amount allocated to the the Indian Defence to Rs 2,29,000 crore. In the Interim Budget presented by the UPA-II government, the amount was Rs 2,24,000 crore.
In the Narendra Modi government's maiden Budget, Jaitley allotted an additional Rs 1,000 crore to the One Rank One Pension scheme.
An additional sum of Rs 5,000 crore has also been set aside for defence outlay over and above the amount provided under the Interim Budget to give a boost to the modernisation of the armed forces. "I propose to increase the capital outlay for the defence by Rs 5,000 crore over the amount provided in the interim budget. This includes a sum of Rs 1,000 crore for accelerating the development of railway system in border areas," Jaitley said adding that acquisition processes would be streamlined for making it speedy and more efficient.
Jaitley also proposed setting up of a war memorial at Prince's Park near the India Gate in Delhi and a national police memorial and set aside Rs 100 crore and Rs 50 crore for these respectively.
The Finance Minister also announced assistance in Left-wing extremist activity areas as well as for socio-economic development of villages along the borders.
On increasing FDI limit to 49 per cent through the Foreign Investment Promotion Board (FIPB) route in the defence sector with full Indian management and control, Jaitley said, "India today is a largest buyer of defence equipment in the world and domestic manufacturing capabilities in this area are still in a nascent stage.
"We are buying substantial part of our defence requirements directly from foreign players, companies controlled by foreign governments and foreign private parties are supplying our defence requirements to us and at a considerable outflow of foreign exchange," he said.
"Currently, we permit 26 per cent FDI in defence manufacturing. The composite cap of foreign exchange is being raised to 49 per cent with full Indian management and control through the FIPB route," Jaitley said. The last government had allowed FDI limit to 26 per cent through FIPB approval route and allowed FDI up to 100 per cent through the Cabinet Committee on Security-approval route.
For providing resources to public and private sector companies including small and medium enterprises to support research and development in developing defence systems, Jaitley proposed a Rs 100 crore Technology Development Fund to support the objective. He said a separate fund in this regard was announced in 2011 by the previous government "but beyond the announcement, no action was taken."
Defence forces are working towards modernising their assets and look towards finalising major deals such as the 126 multi-role combat aircraft contract, which is expected to be worth over Rs 60,000 crore. The other major acquisitions expected to be finalised in next few weeks include the deals for 22 Apache combat choppers, 15 Chinook heavy-lift helicopters and six mid-air refuelling aircraft.
The ministry has been seeking additional funds of Rs 40,000 crore since last few years.
(With additional information from PTI)
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