Finance Minister Nirmala Sitharaman announced in her interim budget speech on Thursday that a ₹1 lakh crore corpus will be established with a 50-year interest-free loan for long-term financing research and innovation in sunrise domains which also includes deep defence technology.
Though the details of scheme allocation under different heads for ministries to take up R&D projects will emerge later, it appears to answer long-standing demand for greater enhancement of funds for innovations in core areas of defence that includes for marine and air platform engine development and manufacturing in India besides for next generation weapon system needed at a time of growing global insecurities.
According to the FM’s speech in Lok Sabha, the ₹1 lakh crore corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will also encourage the private sector to scale up research and innovation significantly in sunrise domains, Sitharaman added.
The full-fledged budget will be presented in July post the Lok Sabha elections. “This is an encouraging budget....We are fully confident that we will achieve the target of becoming a developed nation by 2047,” Defence Minister Rajnath Singh said on the interim budget.
For defence budget 2023-24, Centre had earmarked a capital outlay estimated at ₹12,850 crores for R&D, an increase of 7.2 per cent over ₹11,981.81 crores listed in 2022–23 (BE). The overall outlay was ₹5.9 lakh crore for the Defence Ministry which accounted for over 13 per cent of the total expenditure of the union government.
After the USA and China, as per Stockholm International Peace Research Institute (SIPRI), India was the third largest defence spender in absolute terms in 2021. Over the years, however, the budgetary allocations have not met the expectations of the three armed forces which has to address the possibility of a two front war with inimical neighbours.