Pune: In his budget address, Finance Minister Arun Jaitley said the government will develop two defence industrial production corridors and bring out an industry-friendly military production policy to promote the domestic defence industry. He, however, did not explain the contours of the project.
Later Defence Minister Nirmala Sitharaman said, “These are the first ever Defence Production Corridors being formed in the country. These corridors will give a big boost to defence production in the country. The announcement by the finance minister has paved the way for setting up the first defence production corridor in Tamil Nadu. The second one will be announced shortly.”
Officials from defence industries associations said that Maharashtra has an edge over other states, given a large number of industries here engaged in defence equipments production. Also, last year the Maharashtra government had announced setting up industrial facilities exclusively for defence equipment production. The government has identified land for setting up two such facilities, one at Jejuri near Pune and another in Ahmednagar district, officials said.
Some leading Maharashtra-based private companies, including Anil Ambani’s Reliance Defence, have shown interest in venturing into defence equipment production.
“The prevailing ecosystem is conducive for the defence production corridor in the state”, remarked an official from defence equipments manufacturers association.
However, an announcement of another defence production policy by Arun Jaitley has also put the industry leaders on the backfoot as the previous such policy (announced in 2016) is yet to be fully implemented. “The government has not implemented the previous policy. There is no proper budgetary support and now another policy has been announced”, another association official said.
Dhiraj Mathur, Leader Aerospace and Defence, PwC India, said, “The defence budget for 2018-19 reverses a five-year trend of decreasing capital budgets. The announcement of a new defence production policy and two defence industrial production corridors is welcome. However, it is not clear how they will be set up as there appears to be no budgetary allocation.”