Wanted: A Coherent Defence Manufacturing Policy

Uttar Pradesh is set to receive a defence industrial corridor projected to attract an investment of Rs20,000 crore. According to a Business Standard report, the Yogi Adityanath government expects defence manufacturing to be one of the key drivers of industrialization in the state. The problem is, without a coherent manufacturing and acquisition policy from the defence ministry or the central government, achieving that objective will be tough.

The Union defence ministry is increasingly falling short of funds. So much so that some fear that the fast rising allowances and pension costs are crimping funds for modernization and capital spending, the key drivers for local defence manufacturing. The accompanying chart says it all.

For instance, in the recent Union budget, less than 10% of the incremental hike in defence allocation went to fund modernization, shows an analysis by Laxman Kumar Behera, research fellow at the Institute for Defence Studies and Analyses (IDSA). “The share of pay and allowances and pension in the ministry of defence allocation has been increasing consistently since the mid-2010s. A large part of this increase has come at the cost of the modernisation budget, which now accounts for less than one-fifth of the ministry of defence’s total allocation, down from a high of 26%,” Behera said in a note. “This is highly undesirable and needs to be corrected at the earliest for the sake of India’s robust defence preparedness.” Read More…

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