Budget 2023 & Defence - Capital Outlay Allocation Comes As A Dampener: ICICI Securities
Indian defence capital budget rose a mere 6.8% YoY (FY24BE vis-a-vis FY23BE) to Rs 1.62 trillion.
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ICICI Securities Report
Indian defence capital budget rose a mere 6.8% YoY (FY24BE vis-a-vis FY23BE) to Rs 1.62 trillion. Key points:
Capital budget rose at its slowest pace in the past six years;
capital budget as a %age of total defence budget is 28.5%; and
among broad categories, budget for aircraft, aero engine and naval fleet has been impacted the most while that for other equipment is at the highest-ever level of Rs 670 billion.
On the positive front, research and development budget has been raised 7.3% YoY to Rs 129 billion- the highest-ever level. Allocation for Indian Space Research Organisation has also been lowered with budget and capex on space research (FY24BE vis-a-vis FY23BE) down 8% YoY and 15% YoY, respectively.
In absolute terms, FY24 space budget and capex on research is at the similar level as FY20.
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