Lok Sabha Question No. 3767 (UNSTARRED), answered on 2023-08-11
Subject: Defence Modernization
Ministry: DEFENCE
Asked by: Dean Kuriakose, Anumula Revanth Reddy

## GOVERNMENT OF INDIA MINISTRY OF DEFENCE DEPARTMENT OF DEFENCE

## LOK SABHA UNSTARRED QUESTION NO. 3767

TO BE ANSWERED ON 11 th  August, 2023

## DEFENCE MODERNIZATION

## 3767.   ADV. DEAN KURIAKOSE: SHRI ANUMULA REVANTH REDDY:

Will the Minister of DEFENCE be pleased to state:

- (a) the details for the meagre allocation of resources for defence modernization along with the reason(s) for reduced expenditure on defence positions along with the depleting state of funds for procurement by the Government;
- (b)  the  steps  taken  by  the  Government  to  encourage  the  indigenous  industry  to  contribute towards defence modernization instead of using bulk imports;
- (c) whether the Government has any data/records on the status of modernization of various weapon systems, platforms, equipment, and ammunition of Indian Armed Forces separately during the last five years and the current year;
- (d) if so, the details thereof along with the criteria used for determining the modernization level;
- (e) if not, the reasons therefor and whether the Government considers it necessary to do so; and
- (f) whether the Government has any mechanism/guidelines to ensure the modernization aligned with operational readiness, threat perception, technological advancement, and indigenisation, if so, the details thereof and if not, the reasons therefor?

## A  N  S  W  E  R

MINISTER OF STATE IN THE MINISTRY OF DEFENCE

(SHRI AJAY BHATT)

(a):  There is no meagre allocation of resources for defence modernization and allocation for modernization under total Capital Outlay for defence services has gone up from Rs. 80,959.08 crore in FY 2019-20 to Rs. 1,32,301.27 crore in FY 2023-24. The projected and allocated funds under Capital Acquisition (Modernisation Budget) in BE 2023-24 are as follows: -

(Rs. in Crore)

| Capital Acquisition (Modernization Budget)   | Projection BE 2023-24 1,32,841.04   | Allocation BE 2023-24 1,32,301.27   |
|----------------------------------------------|-------------------------------------|-------------------------------------|

The allocated funds are optimally utilized towards operational activities. If required, the schemes are reprioritized to ensure that urgent and critical capabilities are acquired without any compromise to operational preparedness of the Defence Services.

(b):  With a view to encourage indigenous industry to contribute to defence modernization, funds for financial year 2023-24 have been earmarked in the ratio of 75:25, where 75% i.e. Rs.  99,223.03  Crore  is  for  Domestic  procurement  and  25%  i.e.  Rs.  33,078.24  Crore  is  for Foreign procurement.

Further, the Government has taken several policy initiatives in the past few years and brought in reform to encourage indigenous design, development and manufacture of defence equipment,  thereby  promoting  self  reliance  in  defence  manufacturing  &  technology  in  the country. These initiatives, inter-alia, include according priority to procurement of capital items from domestic sources under Defence Acquisition Procedure (DAP)-2020; Notification of four 'Positive Indigenization Lists' of total 411 items of Services and four 'Positive Indigenization Lists' of total  4666 items of Defence Public Sector Undertakings (DPSUs), for  which there would be an embargo on the import beyond the timelines indicated against them; Simplification of  Industrial  licensing  process  with  longer  validity  period;  Liberalization of  Foreign Direct Investment(FDI) policy allowing 74%  FDI under automatic route; Simplification  of Make procedure;  Launch  of  Mission  Defspace;  Launch  of  innovations  for  Defence  Excellence (iDEX)  scheme  involving  startups  &  Micro,  Small  and  Medium  Enterprises  (MSME); Implementation of public procurement (preference to Make in India )   Order 2017; Launch of an  indigenization  portal  namely  SRIJAN  to  facilitate  indigenization  by  Indian  Industry including MSME; Reforms in Offset policy with thrust on attracting investment and transfer of Technology for defence  manufacturing by assigning higher multipliers; Establishment of two Defence Industrial Corridors, one each in Uttar Pradesh and Tamil Nadu ; Opening up of Defence Research & Development (R&D) for industry, startups and academia with 25 percent of  Defence  Research  and  Development  budget;  and  progressive  increase  in  allocation  of Defence Budget of military modernization for procurement from domestic sources, etc.

(c) to (f):  The desired information is sensitive and strategic in nature and its disclosure would impact the operational capabilities and preparedness.

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