Indian Finance Minister Arun Jaitley said on Thursday he was keeping an eye on the impact of the Iraq crisis on the economy, and announced just an additional Rs50 billion for the Defence Budge, taking the amount allocated to the Indian Defence to Rs2.29 trillion. In the interim budget presented by the Manmohan Singh government, the amount was Rs2.24 trillion.
Mr Jaitley said he was conscious of the fact that Iraq crisis was leaving behind an impact on oil prices and that the situation in the Middle East continues to be volatile.
“I propose to increase the capital outlay for the defence by Rs5,000 crore over the amount provided in the interim budget. This includes a sum of Rs1,000 crore for accelerating the development of railway system in border areas,” Mr Jaitley said, adding that acquisition processes would be streamlined for making it speedy and more efficient.
On increasing FDI limit to 49 per cent through the Foreign Investment Promotion Board (FIPB) route in the defence sector with full Indian management and control, Mr Jaitley said: “India today is a largest buyer of defence equipment in the world and domestic manufacturing capabilities in this area are still in a nascent stage.
“We are buying substantial part of our defence requirements directly from foreign players, companies controlled by foreign governments and foreign private parties are supplying our defence requirements to us and at a considerable outflow of foreign exchange,” he said.
