Lok Sabha Question No. 619 (UNSTARRED), answered on 2020-09-16
Subject: Modernisation of Armed Forces
Ministry: DEFENCE
Asked by: Sambhajirao Mane Dhairyasheel, Shrikant Eknath Shinde, Sujay Radhakrishna Vikhepatil, Unmesh Bhaiyyasaheb Patil, Hemant Patil

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK SABHA

## UNSTARRED QUESTION NO.619

TO BE ANSWERED ON 16 th  SEPTEMBER, 2020

## MODERNISATION OF ARMED FORCES

619. SHRI DHAIRYASHEEL SAMBHAJIRAO MANE:

DR. SHRIKANT EKNATH SHINDE: DR. SUJAY RADHAKRISHNA VIKHE PATIL: SHRI UNMESH BHAIYYASAHEB PATIL: SHRI HEMANT SRIRAM PATIL:

Will the Minister of DEFENCE j{kk ea=h be pleased to state:

- (a) the details of budget estimates, revised estimates and actual expenditure on modernisation of armed forces during the last five years and the current year;
- (b)  the  details  of  investment  made  in  the  production  of  military  equipment  during  the  last three  years  and  the  current  year  and  the  Defence  agreements  signed  for  procurement  of Defence equipment during the said period;
- (c) whether the Government has any proposal to allow the private sector to play a major role in the production of weapon system for the armed forces and if so, the details thereof and the percentage of funds allocated for procurement of indigenous equipments; and
- (d)  the  steps  taken  by  the  Government  for  modernisation  of  armed  forces  to  improve weaponry  like  tanks  and  missiles  and  to  reduce  the  dependence  on  import  along  with  the contribution to the Defence sector under 'Make in India' for the purpose?

## A    N    S    W    E    R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI SHRIPAD NAIK)

(a) to (d): A statement is attached.

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## STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (d) OF LOK SABHA UNSTARRED  QUESTION  NO.  619  FOR  ANSWER  ON  16.09.2020  REGARDING 'MODERNISATION OF ARMED FORCES'.

(a)  The  details  of  Budget Estimates  (BE),  Revised Estimates (RE) and  Actual  Expenditure (Actuals)    on  the  modernization(Capital  Acquisition)  of  Armed  Forces,  under  Defence Services Estimates (DSE), for the last five years and the current year are as under:-

(Rs. in Crore)

| Year    | Budget Estimates   | Revised Estimates   | Expenditure (Actuals)   |
|---------|--------------------|---------------------|-------------------------|
| 2015-16 | 77,406.69          | 65,400.00           | 62,235.54               |
| 2016-17 | 69,898.51          | 62,619.36           | 69,280.16               |
| 2017-18 | 69,473.41          | 68,965.24           | 72,732.20               |
| 2018-19 | 74,115.99          | 73,836.43           | 75,892.85               |
| 2019-20 | 80,959.08          | 89,836.16           | 91,128.74*              |
| 2020-21 | 90,047.80          | --                  | 31747.06#               |

(b)  to  (d):  In  May  2001,  the  Defence  Industry  sector,  which  was  hitherto  reserved  for  the public sector,  was opened up to 100% for Indian private sector participation, with Foreign Direct  Investment(FDI)  up  to  26%  both  subject  to  licensing.  Further,  Department  of Industrial Policy  & Promotion, Ministry of Commerce & Industry has notified revised FDI policy under which FDI is allowed under automatic route upto 49% and beyond 49% through Government route wherever it is likely to result in access to modern technology or for other reasons to be recorded.

During the last three financial year (2017-18 to 2019-20) and current year (upto July, 2020), 183 capital contracts  have  been  signed  with  Indian  vendors and  foreign  vendors  for procurement of defence equipment for Armed Forces.

Under 'Atmanirbhar Bharat' campaign of Govt of India, Ministry of Defence (MoD) has prepared a list of 101 items for which there would be an embargo on the import beyond the  timeline  indicated  against  them.  This  would  offer  a  great  opportunity  to  the  Indian defence  industry  to  manufacture  these  items  using  their  own  design  and  development capabilities  to  meet  the  requirements  of  the  Armed  Forces  in  the  coming  years.  This  list includes  some  high  technology  weapon  system  like  artillery  guns,  assault  rifles,  corvettes, sonar  systems,  transport  aircrafts,  light  combat  helicopters  (LCHs),  radars  and  many  other items to fulfil the needs of our Defence Services.

Since the launch of 'Make in  India' in September 2014, several measures have been taken  by  the  Government  to  promote  indigenous  design,  development  and  manufacture  of defence  &  aerospace  equipment  in  the  country  under  'Make  in  India'  by  harnessing  the capabilities of the public and private sector.

Government  has  notified  the  Strategic  Partnership  (SP)  Model  which  envisages establishment of  long  term  Strategic  Partnership  with  Indian  entities  through  a  transparent and  comparative  process,  wherein  they  would  tie  up  with  global  Original  Equipment Manufacturers  (OEMs)  to  seek  technology  transfers  to  set  up  domestic  manufacturing infrastructure and supply chain.

Government  is  taking  measures  for  modernization  of  the  Armed  Forces,  through procurement of new equipment and upgrading of existing equipment so as to ensure that the Armed  Forces  are  equipped  to  meet  the  entire  spectrum  of  security  challenges.  The modernization projects are progressed as per the approved Capital Acquisition Plans and in terms of the extant Defence Procurement Procedure (DPP).

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