FM Sitharaman allocates ₹1 lakh crore for research & innovation in a push for self-reliance

PoliCharcha | Updated: February 01, 2024, 12:10 PM

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FM Sitharaman allocates ₹1 lakh crore for research & innovation in a push for self-reliance

Finance Minister Nirmala Sitharaman, in her interim budget speech on Thursday, unveiled a groundbreaking initiative, allocating a ₹1 lakh crore corpus for long-term financing in research and innovation. The interest-free loan spanning 50 years is dedicated to promoting advancements in sunrise domains, encompassing crucial areas like defence technology.

While the specifics of the scheme's allocation under various ministries for Research and Development (R&D) projects will be revealed later, it is perceived as a response to the longstanding demand for increased funding in critical defence sectors.

This includes the development and manufacturing of marine and air platform engines within India, along with the creation of next-generation weapon systems, especially in a period of escalating global insecurities.

As per FM Sitharaman's Lok Sabha speech, the ₹1 lakh crore corpus aims to provide long-term financing or refinancing with extended tenors and low or zero interest rates. The initiative is expected to incentivise significant research and innovation in sunrise domains by encouraging greater participation from the private sector.

Defence Minister Rajnath Singh expressed optimism about 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 2023-24 defence budget, the Centre earmarked a capital outlay of ₹12,850 crores for R&D, reflecting a 7.2 percent increase over the previous year's ₹11,981.81 crores. The overall outlay for the Defence Ministry stood at ₹5.9 lakh crore, constituting over 13 percent of the total expenditure of the Union government.

Despite being the third-largest defence spender globally after the USA and China in 2021, India's budgetary allocations for defence have often fallen short of the expectations of the armed forces. The armed forces, grappling with the prospect of a two-front war with adversarial neighbours, have long sought increased financial support to meet their strategic requirements.