Presenting the Union Budget 2022 on Tuesday, 1 February, Finance Minister Nirmala Sitharaman announced, "68 percent of defence capex to be kept for the domestic industry. Aatmanirbharta – our government is committed to local procurement for defence."
The proportion reserved for domestic companies was 58 percent last year.
"The Union Budget 2022-23 envisions a total outlay of Rs 39.45 lakh crore, out of which, the government has allocated a budget of Rs 5.25 lakh crore – 13.31% of the budget – to the Ministry of Defence."
"Defence R&D will be opened up for industry, startups, and academia, with 25 percent of the defence budget earmarked. Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organisations through SPV model," Sitharaman announced.
An independent nodal umbrella body will be set up for meeting wide-ranging testing and certification requirements, she said.
"Artificial intelligence (AI), geospatial systems, drones, semiconductors, green energy, space energy etc have immense potential to assist sustainable development," the finance minister stated.
'Provides Impetus to Modernisation of Defence Services': Defence Min
Welcoming the budget, Defence Minister Rajnath Singh described it as 'excellent' and said that it provides "further impetus to modernisation of Defence Services and Defence Security Infrastructure development, including the Border Road Infrastructure and Coastal Security Infrastructure."
The defence ministry noted that the total Defence Budget represents an increase of Rs 46,970 crore (9.82%) over the budget estimates of 2021-22.
Providing an overview of the budget and how it compares to the estimates of last year, the ministry wrote on Twitter:
The minister took to Twitter, too, to say that defence capital procurement "is in line with the ‘Vocal for Local’ push and it will certainly boost the domestic defence industries."