"Government to Set Up ₹1 Lakh Crore Corpus for Long-Term Funding of R&D Projects, Including Advanced Defense Technologies"

In a significant announcement during her interim budget speech on Thursday, Finance Minister Nirmala Sitharaman unveiled plans to establish a ₹1 lakh crore corpus, providing a 50-year interest-free loan for long-term financing of research and innovation in sunrise domains, with a specific focus on deep defence technology.

While specific details regarding the allocation of funds under different heads for ministries to undertake Research and Development (R&D) projects are expected to be revealed later, the move addresses a longstanding demand for increased funding in critical areas of defence. This includes initiatives for the development and manufacturing of marine and air platform engines within India, along with next-generation weapon systems, crucial in a time of growing global insecurities.

According to Sitharaman's speech in the Lok Sabha, the ₹1 lakh crore corpus aims to provide long-term financing or refinancing with extended tenors and low or negligible interest rates. The Finance Minister expressed the belief that this initiative will incentivize the private sector to significantly enhance research and innovation in sunrise domains.

While the full-fledged budget is scheduled to be presented in July post the Lok Sabha elections, Defence Minister Rajnath Singh praised the interim budget, stating, "This is an encouraging budget....We are fully confident that we will achieve the target of becoming a developed nation by 2047."

In the defense budget for 2023-24, the Central government allocated a capital outlay estimated at ₹12,850 crores for R&D, marking a 7.2% increase over the ₹11,981.81 crores listed in the 2022–23 (BE). The overall outlay for the Defence Ministry was ₹5.9 lakh crore, constituting over 13% of the total expenditure of the Union government.

As per the Stockholm International Peace Research Institute (SIPRI), India ranked as the third-largest defence spender in absolute terms in 2021, following the USA and China. However, the budgetary allocations over the years have fallen short of the expectations of the armed forces, who need to address the potential challenges of a two-front war with neighboring adversaries.

HBL