Finance Minister Nirmala Sitharaman on Monday unveiled Union Budget 2021-22 that aims to shore up the Indian economy post coronavirus pandemic. In this video, discuss major hits and misses from the Union Budget 2021.

Major hits and misses from the Union Budget 2021

Finance Minister Nirmala Sitharaman on Monday unveiled Union Budget 2021-22 that aims to shore up the Indian economy post coronavirus pandemic.

Key highlights and takeaways from the Union Budget 2021

The coronavirus has cost the world approximately 16 trillion dollars and recession hit all five continents, leading to a loss of nearly 400 million jobs.

The financial year 2020 saw insolvencies and closures and the global FDI fell 42 per cent. However, FY 2021 is&nbsp;about building back and&nbsp;not letting history and China repeat itself.

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Morgan Stanley projects global GDP growth of 6.4 per cent for 2021 and&nbsp;IMF projects it 5.4 per cent. The World Bank says the global economy will expand by 4 per cent.

For any of these numbers to convert, countries around the world will have to adapt to the changing economic order and they will have to keep a close watch on the emerging trends, while also working towards&nbsp;diversifying their supply chains from China.

The coronavirus crisis has come with opportunities for radical reform, building better healthcare. The world must also look at re-aligning priorities and&nbsp;Japan is already at it.

Over 40 per cent of Japanese tech companies are shifting their manufacturing base from China. West Asia is adjusting to the new oil order by diversifying its economy.

The start before the United States is to get a grip on the pandemic, before rebuilding its economy.

India is gearing up for its first budget since the pandemic which&nbsp;will be tabled on February 01. The country is already preparing for the future by encouraging investment in the electronic vehicles sector. It is working towards becoming the world's largest EV market.

India is also trying to leverage its online market. A recent report from the United Nations says&nbsp;India's foreign direct investment grew 13 per cent in FY 20 and much of it had to do with investment in the digital sector.

In the last one year, the coronavirus pandemic pushed many consumers and companies online. This shift in consumer behaviour was more evident in India which is the world's second-biggest online market.

India was among the only two major countries that saw an increase in the FDI despite the pandemic as&nbsp;$57 billion poured into India in 2020. The number is likely to increase in FY&nbsp;21 as more companies move out of China.

The UN report also points at an interesting trend that says inflows to the US and Europe dropped into negative territory. However, in South Asia, FDI rose 10 per cent to $65 billion.

This growth, again, was steered by India, and now&nbsp;New Delhi will be looking at all these trends closely as it prepares for February 01.

The coronavirus has cost the world approximately 16 trillion dollars and recession hit all five continents, leading to a loss of nearly 400 million jobs. The financial year 2020 saw insolvencies and closures and the global FDI fell 42 per cent.

The coronavirus has cost the world approximately 16 trillion dollars and recession hit all five continents, leading to a loss of nearly 400 million jobs. The financial year 2020 saw insolvencies and closures and the global FDI fell 42 per cent. However, FY 2021 is about building back and not letting history and China repeat itself. Morgan Stanley projects global GDP growth of 6.4 per cent for 2021 and IMF projects it 5.4 per cent. The World Bank says the global economy will expand by 4 per cent. For any of these numbers to convert, countries around the world will have to adapt to the changing economic order and they will have to keep a close watch on the emerging trends, while also working towards diversifying their supply chains from China. The coronavirus crisis has come with opportunities for radical reform, building better healthcare. The world must also look at re-aligning priorities and Japan is already at it. Over 40 per cent of Japanese tech companies are shifting their manufacturing base from China. West Asia is adjusting to the new oil order by diversifying its economy. The start before the United States is to get a grip on the pandemic, before rebuilding its economy. India is gearing up for its first budget since the pandemic which will be tabled on February 01. The country is already preparing for the future by encouraging investment in the electronic vehicles sector. It is working towards becoming the world's largest EV market. India is also trying to leverage its online market. A recent report from the United Nations says India's foreign direct investment grew 13 per cent in FY 20 and much of it had to do with investment in the digital sector. In the last one year, the coronavirus pandemic pushed many consumers and companies online. This shift in consumer behaviour was more evident in India which is the world's second-biggest online market. India was among the only two major countries that saw an increase in the FDI despite the pandemic as $57 billion poured into India in 2020. The number is likely to increase in FY 21 as more companies move out of China. The UN report also points at an interesting trend that says inflows to the US and Europe dropped into negative territory. However, in South Asia, FDI rose 10 per cent to $65 billion. This growth, again, was steered by India, and now New Delhi will be looking at all these trends closely as it prepares for February 01.

India battles coronavirus effects to excel in Budget 2021

The government should provide additional funds as well as incentives in the upcoming Budget to promote indigenous farm research, oilseeds production, food processing and organic farming for the overall growth of the agriculture sector, according to industry experts.

The direct benefit transfer (DBT) scheme should be utilised more to support farmers instead of giving subsidies, they added.

"Food processing industry has played an important role in better price realisation for the farmer and reducing the cost of intermediaries. The budget must provide special incentives to food processing through incentives such as interest subvention, lower taxes, access to technology and so on," DCM Shriram Chairman and Senior MD Ajay Shriram said.

Referring to the successful PM-KISAN scheme under which Rs 6,000 is paid annually directly into farmers bank accounts, he said the DBT mechanism should be fine-tuned and gradually should be utilized to support farmers in lieu of other subsidies.

"Let the farmer decide how to judicially use the money. With the benefit of DBT, farmers can then buy better seed, use new-age fertilizers, optimize water usage and so on," Shriram said.

Stating that many Indian startups have invested in the agri-technology space, he advocated for a policy that encourages growth of these companies and adoption of latest techniques.

He said there has not been any significant breakthrough in recent years from indigenous agricultural research and development (R&amp;D) and this could be partly on account of resource crunch.

"Two areas that need immediate attention are firstly linking agricultural research with industry requirements and secondly avoiding ideological resistance to new-age technologies such GM crops," Shriram said.

Consulting firm Deloitte India suggested that more funds should be allocated for research and development as well as for increasing the domestic production of oilseeds to reduce imports of cooking oils.

Stating that livestock farming is one of the key pillars for augmenting farmers' income, the consulting firm said one of the big impediments for development of this sector is the prevalence of various diseases that affect mortality, productivity, and overall production.

"Supply of vaccines is not adequate to address the increasing demand. Funding for developing vaccines and creating necessary infrastructure would be required in this budget," Deloitte said. 
Chirag Arora, Founder, Organisch Overseas, said the government must encourage farmers to adopt organic farming.

"The need of the hour is to encourage the private sector into the space by offering tax incentives to startups venturing into this domain. It also needs to augment investment on creation of cold-chains and increase storage capabilities," Arora said.

Last month, in a virtual pre-budget consultation with the finance ministry, Bharat Krishak Samaj (BKS) had said that the government should incentivise balanced use of fertilisers by increasing urea price and lowering rates of phosphatic and potassic (P&amp;K) nutrients in the upcoming Budget.

BKS Chairman Ajay Vir Jakhar had also sought reduction in taxes on diesel and transport subsidy on fruits and vegetables, but demanded tax on unhealthy foods. He had pitched for tripling investment for micro-irrigation and solar pumps for individual farmers as well as funding for distribution of soil moisture measuring sensors.

"Prioritize investment in human resources over infrastructure. There are about 50 per cent vacancies in agriculture research institutions across India. Target 2 per cent expenditure on agri R&amp;D of agriculture GDP over the next few years," BKS had said.

The government should provide additional funds as well as incentives in the upcoming Budget to promote indigenous farm research, oilseeds production, food processing and organic farming for the overall growth of the agriculture sector, according to industry experts.

The government should provide additional funds as well as incentives in the upcoming Budget to promote indigenous farm research, oilseeds production, food processing and organic farming for the overall growth of the agriculture sector, according to industry experts. The direct benefit transfer (DBT) scheme should be utilised more to support farmers instead of giving subsidies, they added. "Food processing industry has played an important role in better price realisation for the farmer and reducing the cost of intermediaries. The budget must provide special incentives to food processing through incentives such as interest subvention, lower taxes, access to technology and so on," DCM Shriram Chairman and Senior MD Ajay Shriram said. Referring to the successful PM-KISAN scheme under which Rs 6,000 is paid annually directly into farmers bank accounts, he said the DBT mechanism should be fine-tuned and gradually should be utilized to support farmers in lieu of other subsidies. "Let the farmer decide how to judicially use the money. With the benefit of DBT, farmers can then buy better seed, use new-age fertilizers, optimize water usage and so on," Shriram said. Stating that many Indian startups have invested in the agri-technology space, he advocated for a policy that encourages growth of these companies and adoption of latest techniques. He said there has not been any significant breakthrough in recent years from indigenous agricultural research and development (R&D) and this could be partly on account of resource crunch. "Two areas that need immediate attention are firstly linking agricultural research with industry requirements and secondly avoiding ideological resistance to new-age technologies such GM crops," Shriram said. Consulting firm Deloitte India suggested that more funds should be allocated for research and development as well as for increasing the domestic production of oilseeds to reduce imports of cooking oils. Stating that livestock farming is one of the key pillars for augmenting farmers' income, the consulting firm said one of the big impediments for development of this sector is the prevalence of various diseases that affect mortality, productivity, and overall production. "Supply of vaccines is not adequate to address the increasing demand. Funding for developing vaccines and creating necessary infrastructure would be required in this budget," Deloitte said. Chirag Arora, Founder, Organisch Overseas, said the government must encourage farmers to adopt organic farming. "The need of the hour is to encourage the private sector into the space by offering tax incentives to startups venturing into this domain. It also needs to augment investment on creation of cold-chains and increase storage capabilities," Arora said. Last month, in a virtual pre-budget consultation with the finance ministry, Bharat Krishak Samaj (BKS) had said that the government should incentivise balanced use of fertilisers by increasing urea price and lowering rates of phosphatic and potassic (P&K) nutrients in the upcoming Budget. BKS Chairman Ajay Vir Jakhar had also sought reduction in taxes on diesel and transport subsidy on fruits and vegetables, but demanded tax on unhealthy foods. He had pitched for tripling investment for micro-irrigation and solar pumps for individual farmers as well as funding for distribution of soil moisture measuring sensors. "Prioritize investment in human resources over infrastructure. There are about 50 per cent vacancies in agriculture research institutions across India. Target 2 per cent expenditure on agri R&D of agriculture GDP over the next few years," BKS had said.

Union Budget 2021: Govt should provide additional funds, incentives for agriculture sector, say experts

Environment became tense in the Puducherry legislative assembly as the&nbsp;Puducherry Chief Minister V Narayanasamy carried on delivering the annual budge for the year 2020-2021, despite objections from the&nbsp;Lieutenant Governor Kiran Bedi.

Kiran Bedia said she wrote to the Chief Minister earlier today with a request to "send the file for laying AFS and Demand for Grants before Assembly for her to accord considered approval and give fresh date for presenting Budget."

However, she later tweeted in the afternoon claiming that the annual budget had still not reached her.

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Annual budget file has still not been released from office of the Chief Minister for Administrative approval by LG, as per UT Act &amp; Business Rules. 
This will lead to a serious financial crisis caused by the office of CM. Ppl of Puducherry pl b informed<a href="https://twitter.com/AmitShah?ref_src=twsrc%5Etfw">@AmitShah</a> <a href="https://twitter.com/rashtrapatibhvn?ref_src=twsrc%5Etfw">@rashtrapatibhvn</a> <a href="https://t.co/M0pvwgvxvY">pic.twitter.com/M0pvwgvxvY</a>
— Kiran Bedi (@thekiranbedi) <a href="https://twitter.com/thekiranbedi/status/1285129075791499266?ref_src=twsrc%5Etfw">July 20, 2020</a></blockquote>
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The session was scheduled to&nbsp;start on 9:30 am on Monday. However, as Kiran Bedi did not reach the assembly for the inaugural speech, the session got delayed&nbsp;and started at 12 pm.

Kiran Bedi alleged that his letter requesting her to deliver inaugural speech reached Rajnivas at 3:30 am today.

"An intriguing case of Puducherry Assembly without the Budget even seen &amp; approved by (LG) &amp; `trustees` wanting to discuss the rooms, design &amp; more!" she tweeted.

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An intriguing case of Puducherry Assembly without the Budget even seen &amp; approved by (LG) &amp; ‘trustees’ wanting to discuss the rooms, design &amp; more! <a href="https://t.co/5pIqO9Cfjs">pic.twitter.com/5pIqO9Cfjs</a>
— Kiran Bedi (@thekiranbedi) <a href="https://twitter.com/thekiranbedi/status/1285065472191238145?ref_src=twsrc%5Etfw">July 20, 2020</a></blockquote>
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In the budget, the Chief Minister announced abolition of drinking water tax and electricity tax (less than 100 units) for BPL families. "The government has decided to start Nammalvazhvar Agricultural Innovation Program and subsidise crops including grains and paddy," he said.

Environment became tense in the Puducherry legislative assembly as the Puducherry Chief Minister V Narayanasamy carried on delivering the annual budge for the year 2020-2021, despite objections from the Lieutenant Governor Kiran Bedi.

Environment became tense in the Puducherry legislative assembly as the Puducherry Chief Minister V Narayanasamy carried on delivering the annual budge for the year 2020-2021, despite objections from the Lieutenant Governor Kiran Bedi. Kiran Bedia said she wrote to the Chief Minister earlier today with a request to "send the file for laying AFS and Demand for Grants before Assembly for her to accord considered approval and give fresh date for presenting Budget." However, she later tweeted in the afternoon claiming that the annual budget had still not reached her. Annual budget file has still not been released from office of the Chief Minister for Administrative approval by LG, as per UT Act & Business Rules. This will lead to a serious financial crisis caused by the office of CM. Ppl of Puducherry pl b informed@AmitShah @rashtrapatibhvn pic.twitter.com/M0pvwgvxvY — Kiran Bedi (@thekiranbedi) July 20, 2020 × The session was scheduled to start on 9:30 am on Monday. However, as Kiran Bedi did not reach the assembly for the inaugural speech, the session got delayed and started at 12 pm. Kiran Bedi alleged that his letter requesting her to deliver inaugural speech reached Rajnivas at 3:30 am today. "An intriguing case of Puducherry Assembly without the Budget even seen & approved by (LG) & `trustees` wanting to discuss the rooms, design & more!" she tweeted. An intriguing case of Puducherry Assembly without the Budget even seen & approved by (LG) & ‘trustees’ wanting to discuss the rooms, design & more! pic.twitter.com/5pIqO9Cfjs — Kiran Bedi (@thekiranbedi) July 20, 2020 × In the budget, the Chief Minister announced abolition of drinking water tax and electricity tax (less than 100 units) for BPL families. "The government has decided to start Nammalvazhvar Agricultural Innovation Program and subsidise crops including grains and paddy," he said.

Puducherry CM presents budget without LG Kiran Bedi despite her objections

During the Union Budget announcement on February 1, Twitter witnessed 11 lakh related tweets between January 30 and February 3, 2020. According to Twitter, The Economic Survey, which was also released during the same, also continued to trend on the website for a while.

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/business-economy/20-key-budget-highlights-you-must-know-278059" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/20-key-budget-highlights-you-must-know-278059&amp;sa=U&amp;ved=2ahUKEwiL5tvTrrznAhU0yzgGHfqYAg4QFjAAegQIBRAB&amp;usg=AOvVaw11NKz5U2TGTn-UBDdYbWP-" dir="ltr" href="https://www.wionews.com/business-economy/20-key-budget-highlights-you-must-know-278059" target="_blank">20 key Budget highlights you must know</a>

According to Twitter, there were 12 live streams of the budget on the website using a feature called the ''caurosel'', which facilitated conversations among policymakers, influencers, and journalists.

This year's Budget speech was also the longest speech ever made by a Finance Minister in the history of India.

The conversation on Twitter wasn't restricted just to the English language, as local languages including Hindi, Marathi, and Tamil also brought some traction to the portal.

<h6><img alt="ppppp" data-entity-type="file" data-entity-uuid="f017a6ad-5004-495e-9a2a-805de1e7a432" src="//cdn.wionews.com/sites/default/files/inline-images/Untitled%20design%20%284%29_31.jpg" /> 
In this handout photograph taken and released by India's Presidential Palace on February 1, 2020, Finance Minister Nirmala Sitharaman (R) poses for photographs along with President Ram Nath Kovind (C) at Rashtrapati Bhavan - the Presidential Palace, before presenting at the Parliament the 2020 union budget, in New Delhi | AFP 
&nbsp;</h6>

In the budget, over Rs&nbsp;17,300 crore has been allocated for the Ministry of External Affairs, with Rs 100 crore earmarked for the strategic Chabahar Port project in southeastern Iran that gives India connectivity to Afghanistan bypassing Pakistan.

The total aid to countries has decreased by about Rs 56 crore from Rs 6,963 revised estimates of 2019-20 to Rs 6,907crore in Budget 2020-21.

While Nepal saw a cut of Rs 400 crore in aid by India from Rs 1,200 crore in 2019-20 to Rs 800 crore in 2020-21, Myanmar saw a hike in allocation from Rs 170 crore in 2019-20 to Rs 300 crore for the next fiscal.

The aid for the strategically-important Chabahar Port which was zero in the revised estimates of 2019-20 has gone up to Rs 100 crore for the next fiscal.

<img alt="pp" data-entity-type="file" data-entity-uuid="792929c5-cf3c-431d-bd05-c0d1e7c23aad" src="//cdn.wionews.com/sites/default/files/inline-images/Untitled%20design%20%285%29_23.jpg" />

The Port complex, backed by India, on Iran's coast along the Gulf of Oman is being developed to provide an alternative trade route between India and Afghanistan.

The aid allocation for Bhutan has gone up from Rs 2,674.51 crore in 2019-20 to Rs 2,884.65 crore in the next fiscal.

Aid allocation to the Maldives has been reduced by Rs 75 crore to Rs 1,025 crore in the next fiscal.

Also read:&nbsp;<a data-ctorig="https://www.wionews.com/business-economy/budget-2020-find-out-what-will-you-lose-in-new-tax-regime-278054" data-cturl="https://www.google.com/url?client=internal-element-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/business-economy/budget-2020-find-out-what-will-you-lose-in-new-tax-regime-278054&amp;sa=U&amp;ved=2ahUKEwj68vjErrznAhX8yzgGHalIAocQFjAAegQIABAC&amp;usg=AOvVaw0NoV-JcE2LclL0h_tPbNtt" dir="ltr" href="https://www.wionews.com/business-economy/budget-2020-find-out-what-will-you-lose-in-new-tax-regime-278054" target="_blank">Budget 2020:&nbsp;Find out&nbsp;what&nbsp;will you lose&nbsp;in&nbsp;new tax regime</a>

In the budget 2020-21, aid allocation for African countries is Rs 350 crore, Rs 200 crore for Bangladesh and Sri Lanka, Rs 140 crore for Seychelles, Rs 20 crore to Latin American countries and Rs 2 crore to Mongolia.

The primary hashtag used to consolidate all things budget, users employed #UnionBudget2020 and #IndiaBudget2020.

During the Union Budget announcement on February 1, Twitter witnessed 11 lakh related tweets between January 30 and February 3, 2020. According to Twitter, The Economic Survey, which was also released during the same, also continued to trend on the website for a while.

During the Union Budget announcement on February 1, Twitter witnessed 11 lakh related tweets between January 30 and February 3, 2020. According to Twitter, The Economic Survey, which was also released during the same, also continued to trend on the website for a while. Also read: 20 key Budget highlights you must know According to Twitter, there were 12 live streams of the budget on the website using a feature called the ''caurosel'', which facilitated conversations among policymakers, influencers, and journalists. This year's Budget speech was also the longest speech ever made by a Finance Minister in the history of India. The conversation on Twitter wasn't restricted just to the English language, as local languages including Hindi, Marathi, and Tamil also brought some traction to the portal. In this handout photograph taken and released by India's Presidential Palace on February 1, 2020, Finance Minister Nirmala Sitharaman (R) poses for photographs along with President Ram Nath Kovind (C) at Rashtrapati Bhavan - the Presidential Palace, before presenting at the Parliament the 2020 union budget, in New Delhi | AFP In the budget, over Rs 17,300 crore has been allocated for the Ministry of External Affairs, with Rs 100 crore earmarked for the strategic Chabahar Port project in southeastern Iran that gives India connectivity to Afghanistan bypassing Pakistan. The total aid to countries has decreased by about Rs 56 crore from Rs 6,963 revised estimates of 2019-20 to Rs 6,907crore in Budget 2020-21. While Nepal saw a cut of Rs 400 crore in aid by India from Rs 1,200 crore in 2019-20 to Rs 800 crore in 2020-21, Myanmar saw a hike in allocation from Rs 170 crore in 2019-20 to Rs 300 crore for the next fiscal. The aid for the strategically-important Chabahar Port which was zero in the revised estimates of 2019-20 has gone up to Rs 100 crore for the next fiscal. The Port complex, backed by India, on Iran's coast along the Gulf of Oman is being developed to provide an alternative trade route between India and Afghanistan. The aid allocation for Bhutan has gone up from Rs 2,674.51 crore in 2019-20 to Rs 2,884.65 crore in the next fiscal. Aid allocation to the Maldives has been reduced by Rs 75 crore to Rs 1,025 crore in the next fiscal. Also read: Budget 2020: Find out what will you lose in new tax regime In the budget 2020-21, aid allocation for African countries is Rs 350 crore, Rs 200 crore for Bangladesh and Sri Lanka, Rs 140 crore for Seychelles, Rs 20 crore to Latin American countries and Rs 2 crore to Mongolia. The primary hashtag used to consolidate all things budget, users employed #UnionBudget2020 and #IndiaBudget2020.

Twitter recorded 11 lakh-Budget related tweets between Jan 30-Feb 3

The state of Indian economy reflected in India's GDP to the growth of 4.8 per cent in 2019-20, and its projected GDP growth as per IMF at 5.8 per cent for 2020-21, coupled with the rise in fiscal deficit to 3.8 per cent, has constrained the government from enhancing the allocations for the Ministry of Defence.&nbsp;

The increased allocations to socio-economic sectors for boosting economic growth and on development of infrastructure had a bearing on the defence allocation, with a marginal increase in the defence <a href="https://www.wionews.com/opinions-blogs/union-budget-2020-government-has-taken-bold-steps-to-put-economy-back-on-track-278226">budget allocation</a> from Rs 318,000 crores in &nbsp;2019-20 to Rs 337,533 crores for 2020-21.&nbsp;

The allocation for the revenue head continues to be in excess of the capital expenditure. Revenue allocation is essential for the maintenance of the weapons, equipment, transport and ammunition for the smooth functioning of the Armed Forces, apart from repairs, overhauls and procurements for the recoupment of the stores and the reserves. &nbsp;

The revenue allocation saw a marginal increase from Rs 201901.76 in 2019-20 to Rs 209319.00 for 2020-21 (Increase of Rs 7417.24 crores)&nbsp;

On the capital expenditure allocation, there is only an increase of Rs 3340 crores in the budgetary allocation from a RE (Revised Estimates) in 2019-20 of Rs 110,394.31 crores to Rs 113734 crores for 2020-21. &nbsp;

Despite a rationalisation of the requirements carried out by the Navy and IAF, (though the allocation to the Navy has risen from 13 per cent to 18 per cent in the current budget), this allocation with the committed liabilities, of the past will fall short of the requirements for modernisation.&nbsp; 
 
WATCH: Budget 2020: Hits and misses 
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The largest increase in terms of budgetary allocation for capital expenditure is for the IAF of Rs 3979 crores followed by Army at Rs 3531 crores. The Indian Army has committed liabilities for the pending procurements of artillery gun systems, rifles and ammunition. IAF has liabilities for the acquisition of aircraft&nbsp;both from HAL and abroad.&nbsp;

Closer scrutiny of the allocation of the capital expenditure, reveals there is an enhanced share for aircraft and aero engines, for all the 3 services from FY 2019-20 to FY 2020-21 apart from their core acquisitions of weapon systems and naval fleet.&nbsp;

The allocation for aircraft and aero engines, for the Army, is Rs 4000 crores up from Rs 2115 Crores from last FY; Navy from Rs 2400 crores to Rs 4640 crores; and IAF from Rs 24807 to Rs 26909 crores to the FY 2020-21. Much of the increased IAF allocation will go to HAL for funding the contract of 83 LCA Mk-1A.&nbsp;

The Indian Armed Forces need to continue their modernisation to meet the growing challenges in the neighbourhood but the performance on the key economic parameters, will not allow for greater budgetary support in the next financial year(s).&nbsp;

Some long in the pipeline reforms such as enhanced FDI for Defence manufacturing, IPR protection and Defence SEZs will bring in more commitment of investment in defence production.&nbsp;

A two-pronged pragmatic approach could hold the key for meeting our security challenges.&nbsp;

At the strategic level of international relations – by forging alliances with partners who hold a stake in the Indian Sub-continent and the Indian Ocean Region. &nbsp;

The Quad in the Indian Ocean Region is one such welcome move, apart from securing naval berths in the friendly nations from Vietnam and Indonesia in the East to Qatar and Seychelles in the West, to counter the growing Chinese influence in the region buttressed by Chinese investments and OBOR.&nbsp;

The second approach involves a more pragmatic approach to continue modernisation of the Armed Forces by way of greater participation of the private industry through reliance on making in India and also assembling in India. &nbsp;

This initiative has given proven results in terms of faster induction of patrol vessels for Navy, K9 Catapult for the Indian Army and large number of key systems including airframes for LCA being sourced from the private industry – moving forward, the shortlisting of L&amp;T with MDL for the P75I project as a Strategic Partner, displays the growing confidence on the capabilities. &nbsp;

There needs to be more such partnerships of the Public Sector and Private Sector, to meet the shortfalls in the budgetary allocation to fill in the wide gaps of technology, capital and to broad base the defence production in the country.&nbsp;

With the creation of the office of CDS (Chief of Defence Staff) and the enhanced powers of procurement to the services, it is hoped that the three wings of India’s armed forces may operate in synergy in terms of defence spends, both for capital and revenue expenditure. India’s security concerns mandate a strong army, navy and air force where the three wings work cohesively for maximum tactical and operational efficiency.&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)&nbsp;

*Source for Data: Union Finance Ministry Expenditure Budget Bill FY 2020-21.&nbsp;

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The state of Indian economy reflected in India's GDP to the growth of 4.8 per cent in 2019-20, and its projected GDP growth as per IMF at 5.8 per cent for 2020-21, coupled with the rise in fiscal deficit to 3.

The state of Indian economy reflected in India's GDP to the growth of 4.8 per cent in 2019-20, and its projected GDP growth as per IMF at 5.8 per cent for 2020-21, coupled with the rise in fiscal deficit to 3.8 per cent, has constrained the government from enhancing the allocations for the Ministry of Defence. The increased allocations to socio-economic sectors for boosting economic growth and on development of infrastructure had a bearing on the defence allocation, with a marginal increase in the defence budget allocation from Rs 318,000 crores in 2019-20 to Rs 337,533 crores for 2020-21. The allocation for the revenue head continues to be in excess of the capital expenditure. Revenue allocation is essential for the maintenance of the weapons, equipment, transport and ammunition for the smooth functioning of the Armed Forces, apart from repairs, overhauls and procurements for the recoupment of the stores and the reserves. The revenue allocation saw a marginal increase from Rs 201901.76 in 2019-20 to Rs 209319.00 for 2020-21 (Increase of Rs 7417.24 crores) On the capital expenditure allocation, there is only an increase of Rs 3340 crores in the budgetary allocation from a RE (Revised Estimates) in 2019-20 of Rs 110,394.31 crores to Rs 113734 crores for 2020-21. Despite a rationalisation of the requirements carried out by the Navy and IAF, (though the allocation to the Navy has risen from 13 per cent to 18 per cent in the current budget), this allocation with the committed liabilities, of the past will fall short of the requirements for modernisation. WATCH: Budget 2020: Hits and misses × The largest increase in terms of budgetary allocation for capital expenditure is for the IAF of Rs 3979 crores followed by Army at Rs 3531 crores. The Indian Army has committed liabilities for the pending procurements of artillery gun systems, rifles and ammunition. IAF has liabilities for the acquisition of aircraft both from HAL and abroad. Closer scrutiny of the allocation of the capital expenditure, reveals there is an enhanced share for aircraft and aero engines, for all the 3 services from FY 2019-20 to FY 2020-21 apart from their core acquisitions of weapon systems and naval fleet. The allocation for aircraft and aero engines, for the Army, is Rs 4000 crores up from Rs 2115 Crores from last FY; Navy from Rs 2400 crores to Rs 4640 crores; and IAF from Rs 24807 to Rs 26909 crores to the FY 2020-21. Much of the increased IAF allocation will go to HAL for funding the contract of 83 LCA Mk-1A. The Indian Armed Forces need to continue their modernisation to meet the growing challenges in the neighbourhood but the performance on the key economic parameters, will not allow for greater budgetary support in the next financial year(s). Some long in the pipeline reforms such as enhanced FDI for Defence manufacturing, IPR protection and Defence SEZs will bring in more commitment of investment in defence production. A two-pronged pragmatic approach could hold the key for meeting our security challenges. At the strategic level of international relations – by forging alliances with partners who hold a stake in the Indian Sub-continent and the Indian Ocean Region. The Quad in the Indian Ocean Region is one such welcome move, apart from securing naval berths in the friendly nations from Vietnam and Indonesia in the East to Qatar and Seychelles in the West, to counter the growing Chinese influence in the region buttressed by Chinese investments and OBOR. The second approach involves a more pragmatic approach to continue modernisation of the Armed Forces by way of greater participation of the private industry through reliance on making in India and also assembling in India. This initiative has given proven results in terms of faster induction of patrol vessels for Navy, K9 Catapult for the Indian Army and large number of key systems including airframes for LCA being sourced from the private industry – moving forward, the shortlisting of L&T with MDL for the P75I project as a Strategic Partner, displays the growing confidence on the capabilities. There needs to be more such partnerships of the Public Sector and Private Sector, to meet the shortfalls in the budgetary allocation to fill in the wide gaps of technology, capital and to broad base the defence production in the country. With the creation of the office of CDS (Chief of Defence Staff) and the enhanced powers of procurement to the services, it is hoped that the three wings of India’s armed forces may operate in synergy in terms of defence spends, both for capital and revenue expenditure. India’s security concerns mandate a strong army, navy and air force where the three wings work cohesively for maximum tactical and operational efficiency. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) *Source for Data: Union Finance Ministry Expenditure Budget Bill FY 2020-21.

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