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A Trend Reversal on the Cards?
Feb 24, 2020

Now, the latest Budget data is out. It tells us the spending on defence is 1.45% of GDP. It has been slipping over past four years.

And that's not all.

The amount allocated from the defence budget towards modernisation has also slipped from 31% to 26.5%. This means more than two-thirds of the funds is still going towards salaries and pensions of the armed forces.

India's defense preparedness was a huge point of debate prior to 2019 elections. The Modi government promised to do what it takes to modernise the armed forces.

Procuring the best and latest ammunition was just one part of the promise. The bigger promise was to ensure that a lot of the new equipment is 'made in India'.

The new defense deals elicited interest from both PSUs and new private sector entrants in this space.

But private sector defence manufacturing in India is yet to take off in a big way.

Data Source: Institute for Defence Studies and Analyses

This Chart Of The Day was published in The 5 Minute WrapUp - Donald Trump Arrives in India: I'm Bullish on These Stocks

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