Military modernisation necessary to meet emerging threats and challenges
A gradual shift in the defence acquisition policy to manufacturing in India will provide huge economic benefits
While inaugurating the biennial air show Aero-India 2015 at Bengaluru on February 18, Prime Minister Narendra Modi said he did not like the fact that India is the world's largest importer of weapon systems. With the NDA government's second budget approaching, the Prime Minister said in the era of shrinking defence budgets India could become a global manufacturing and export hub for arms and defence equipment.
The Prime Minister invited defence MNCs to join hands with Indian public and private sector companies to "make in India" and reiterated the government's willingness to allow FDI in defence beyond the stipulated 49 per cent for projects involving the transfer of cutting-edge technologies. He pointed out that the reduction in dependence on defence imports from 70 to 40 per cent in five years would create 100,000 to 120,000 highly skilled jobs, boost investment, reduce costs and upgrade India's manufacturing and system integration skills. In short, a gradual shift in the defence acquisition policy to manufacturing in India will provide huge economic benefits.
In the budget for 2014-15 presented in July 2014, Finance Minister Arun Jaitley had increased the allocation for defence by 12.5 per cent over the amount allotted for 2013-14. The minister had hiked the defence outlay from Rs 2,03,672 crore (Revised Estimates - RE) in 2013-14 to Rs 2,29,000 crore (Budgetary Estimates - BE) for 2014-15. The defence budget now stands at a low 1.74 per cent of India's projected GDP for 2014-15 and accounts for 12.75 per cent of the country's total government expenditure.