Budget 2023-24 Expectation: What to expect from Union Budget 2023-24 in defence sector

Finance Minister Nirmala Sitharaman is all set to present the Union Budget 2023-24 on 1 February and several sectors are hoping to get benefits from it. One of the key industries that are hoping for some changes in the country’s economic policy is the defence sector. Last year, the Centre had allocated a total of Rs 5.25 lakh crore to the defence ministry, which comprised 13.31 per cent of the total budget. This included a capital outlay of Rs 1.52 lakh crore for the procurement of new equipment. The allocation was intended to strengthen the nation’s borders and boost the objectives of ‘Aatmanirbhar Bharat’ in the defence sector. This year too, industry experts are hoping that Nirmala Sitharaman will announce some policies in favour of the defence sector. Recent geopolitical developments, like the Russia-Ukraine war, the skirmish between Indian and Chinese troops in Tawang and many others could also bring in some changes in this year’s budget. Here is what the defence sector expects from the Union Budget 2023-24: Defence budget to be hiked: OmniScience Capital CEO and Chief Investment Strategist Vikas Gupta expects the defence budget to be hiked to Rs 6.6 lakh crore. “It is possible that it could be even higher given the importance of shoring up the country’s defence forces which are lagging on quite a few weapons systems for several years and the imminent threats in the neighbourhood,” he told Zee Business. According to him, the boost in defence expenditure could come due to continuing tensions with China and the desire of the Quad for India to play a pivotal role in defending trade in the Indian Ocean region. Increase in the amount allocated to R&D and procurement: Many experts want a hike in the amount allocated in the budget to the procurement of new equipment as well as research and development. In last year’s Union Budget, the share of domestic capital procurement was hiked to 68 per cent to reduce imports and push for indigenous equipment for the Indian military. The sector is also hoping for more investment in R&D. This could help the defence industry further in its push for ‘Make in India’. For example, Kranthi Chand, the head of the strategy and special projects at DhruvaSpace told the news agency PTI that the government must give a dedicated allocation of Rs 1,000 crore for the Defence Space Agency (DSA). The DSA came into existence in 2019 and is responsible for India’s progress in the space warfare sector. Focus on MSMEs: Micro, Small and Medium Enterprises (MSMEs) in the defence sector need more attention. The Trade Receivables Discounting System (TReDs) which was created for faster settlement of payment to MSMEs must be extended to the Army, Navy, Airforce and Coast Guard, as per Chief Financial Officer at Crown Group Defence, Jitender Mittal’s statement to the Financial Express. Read all the Latest News, Trending News, Cricket News, Bollywood News, India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.