“CII welcomes the increase of budgetary allocation for Defence Capital expenditure to INR 79, 578 Crores, i.e. 20.31 percent increase over the revised planned expenditure for the fiscal year 2011-12. Though most of the capital expenditure is expected to be absorbed by the recently announced and the ongoing defence projects, the increase would motivate the indigenous industry to invest in building defence capabilities. Indian industry is hopeful that two big projects (Tactical Communication System and the Future Infantry Combat Vehicle) would see the light of the day in the coming fiscal year.
The proposal to extend weighted deduction of 200% for R&D expenditure in an in-house facility for a further period of 5 years is also being viewed as a welcome step to boost the Indigenous research and development capabilities in defence and aerospace sector. Indigenous R&D has been the major road block towards attainment of long cherished goal of 70 percent indigenization in defence. Such steps along with the operationalization of the technology development fund (of 100 crores) would go a long way in strengthening the defence industrial base in the country”.
22nd March 2012