For defence purposes and expediting ‘Atmanirbharta’ (Self Reliance), Finance Minister Nirmala Sitharaman has announced that a new scheme will be launched for strengthening deep-tech technologies.
In her speech while presenting the Interim Budget 2024, she spoke on the importance of technology and related changes and on the need of innovation for laying the foundation for development, as the upcoming time period is expected to be a golden era for youth.
Why Deep-Tech and Defence?
Defence and space play crucial roles in driving technology forward, particularly in cutting-edge initiatives. These ventures demand a solid policy foundation and supportive ecosystems. Given the priority nations place on defence, it’s essential to seriously consider the potential for generating wealth through defence technologies.
The government’s challenge of restricting imports on numerous military hardware items and opening up defence research and development to academia and the private sector has sparked enthusiasm within technology-intensive organizations nationwide.
Moreover, the government has unveiled scientific missions, including quantum and cyber-physical systems, semiconductors, and more. It has established enabling mechanisms through various entities like ISRO, DAE, DRDO, DST, MeitY. These contributions are pertinent to advancing defence systems and enhancing soldier capabilities.
Over time, the Modi government has really focused on making India self-reliant in defence and has brought in lots of changes in the defence sector.
In the budget for 2023, the NDA government led by BJP increased defence spending by 12.95percent, going from Rs 5.25 lakh crore to Rs 5.94 lakh crore. Finance Minister Nirmala Sitharaman said they did this to let the military get new and advanced weapons like fighter jets, submarines, and tanks.
The budget for modernizing the armed forces also went up, from Rs1.52 lakh crore to Rs1.62 lakh crore. A big part of this money is set aside for buying weapons and equipment from Indian manufacturers, following the ‘Make in India’ plan.
Despite being one of the top military spenders globally, India only puts 0.7percent of its GDP into defence research and development, which is much less than China.
Initiatives like iDEX (Innovations for Defence Excellence) show that the government wants more innovation within the country, but there are concerns about not spending enough on defence. A recent parliamentary panel raised these worries, saying the budget for defence-related things isn’t adequate for India to be a global leader.
They pointed out that a lot of money needs to go into modernization and building things like infrastructure. The budget now focuses more on research, innovation, and looking after veterans, showing a change in priorities.
But there are still challenges. A large part of the defence budget goes to personnel and pensions, leaving less for modernization and improving the overall defence industry.
Initial Industry Reaction
Rohit Chouhan, Chief Executive Officer, Nabhdrishti Aerospace concerning the announcement of Rs. 1 Lakh Crore corpus fund to support the private sector for R&D and defense sector says:
“In a crucial move to fortify the growth of private sector R&D and defense sector, the government’s announcement of providing long-term loans at negligible or zero interest emerges as a vital imperative. The development of cutting-edge technologies for defense demands substantial capital investment and endures a protracted gestation period. The scarcity of capital particularly hampers the prospects of startups and small enterprises, hindering their ability to compete with formidable global entities.”
Furthermore, “the initiative holds the potential to spur economic growth by creating employment opportunities within the defense sector. As India strives for “Atma Nirbharta” in defence capabilities, strategic investment in innovative projects becomes paramount. In the face of global uncertainties, a robust, self-reliant defence sector is pivotal for national security. Thus, the proposition of extended, low-interest loans emerges as a strategic step towards bolstering the resilience and competitiveness of the defence industry, ensuring a secure and technologically advanced future.”