Lok Sabha Question No. 3525 (UNSTARRED), answered on 2019-01-02
Subject: Modernisation of Armed Forces
Ministry: DEFENCE
Asked by: RAMESWAR TELI, BHAVANA GAWALI (PATIL), DEEPENDER SINGH HOODA

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK  SABHA

## UNSTARRED QUESTION NO.3525

TO BE ANSWERED ON THE 2 ND  JANUARY, 2019

## MODERNISATION OF ARMED FORCES

## 3525.  SHRI  RAMESWAR  TELI:

SHRIMATI  BHAVANA  PUNDALIKRAO  GAWALI  PATIL: SHRI  DEEPENDER  SINGH  HOODA:

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

- (a) the budget estimates, revised estimates and actual expenditure on modernisation of armed forces during the last five years and the current year;
- (b) whether there has been an underutilization of the allocated funds for modernisation of armed forces during the  said period and if so, the details thereof and the reasons therefor and mechanism put in place for auditing the allocated amount for the purpose;
- (c) 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;
- (d) 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
- (e) the steps taken by the Government for modernisation of armed forces to improve weaponry like tanks and missiles and to reduce the dependence on imported equipment 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

(DR. SUBHASH BHAMRE)

र  ा रा य मं ी

(डा. सुभाष भामरे)

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

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## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (e)  OF  LOK  SABHA UNSTARRED QUESTION NO. 3525 FOR ANSWER ON 2.1.2019

(a) & (b): Budget  Estimates,  Revised  Estimates,  Modified  Appropriation  and Actual  Expenditure  incurred  under  Capital  Acquisition  (Modernisation)  Head under Defence Services Estimates (DSE) for the last five years and the current year are tabulated below:-

(Rs. in crore)

| Year     | Budget Estimates   | Revised Estimates   | Modified Appropriation   | Expenditure   |
|----------|--------------------|---------------------|--------------------------|---------------|
| 2013-14  | 73,444.59          | 66,406.41           | 66,201.92                | 66,850.30     |
| 2014-15  | 75,148.03          | 66,151.73           | 65,706.04                | 65,862.38     |
| 2015-16  | 77,406.69          | 65,400.00           | 61,699.39                | 62,235.54     |
| 2016-17# | 69,898.51          | 62,619.36           | 64,853.86                | 69,280.16     |
| 2017-18* | 69,473.41          | 68,965.24           | 68,980.89                | 72,732.20     |
| 2018-19  | 74,115.99          | Not yet finalised.  | Not yet finalised.       | 54,230.94@    |

The Final Appropriation has been fully and optimally utilized during the said period. Internal Audit and External Audit of the allocated amount is carried out by CGDA and C&AG respectively.

(c) to (e): 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.

:  2   :

During  the  last  three  years  and  current  year  (upto  October,  2018)  out  of total  188  contracts,  121  contracts  have  been  signed  with  Indian  vendors  for procurement of defence equipment for Armed Forces such as Helicopters, Survey vessel, Radar, Ballistic Helmets, Artillery Guns, Simulators, Missiles, Bullet Proof Jackets, Electronic Fuzzes and ammunition. Government  is  taking  measures  for  modernization  of  the  Armed  Forces, through procurement of new equipment and upgrading of existing equipment and systems. The modernization projects are being progressed as per the approved Capital  Acquisition  Plans  and  in  terms  of  the  extant  Defence  Procurement Procedure. 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 also promulgated the policy of Strategic Partnership in the  Defence  Sector  which  encourages  participation  of  the  private  sector  in manufacture of major defence platforms and equipment  in four selected segments viz. Submarines, Fighter  Aircraft,  Helicopters and  Armoured  Fighting vehicles / Tanks.

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