Govt Reserves 75% Of Defence Procurement Budget For Strengthening MSMEs: Rajnath Singh

In order to strengthen the country's micro, small, and medium enterprises and make them ‘Aatmanirbhar’ through purchases, the government has reserved 75 per cent of the defence capital acquisition budget, which amounts to nearly INR 1 lakh crore, said Defence Minister Rajnath Singh.

The Minister highlighted various steps taken for the MSMEs in the defence segment. “We are the first government which imposed restrictions on itself for the import of weapons. We released five positive indigenization lists, under which 509 equipment have been identified, the manufacturing of which will now take place in India,” Singh said.

“Additionally, four positive indigenisation lists for Defence Public Sector Undertakings (DPSUs) were also promulgated, under which 4,666 items were identified, that will be manufactured within the country,” he added.

The objective is to ensure a secure demand outlook for domestic industries, the Minister said during the 'India Manufacturing Show-2023' held in Bengaluru.

Steps Taken By The Government

Singh also made reference to the Innovations for Defence Excellence (iDEX) initiative, which was initiated to engage startups and innovators in enhancing defense manufacturing.

Furthermore, Singh emphasized the government's commitment to supporting small-scale industries, outlining various measures taken for their welfare. This includes the MUDRA scheme initiated in 2015, which provides collateral-free loans to MSMEs, as well as additional credit assistance during the Covid 19 pandemic.

Small Industries Create More Employment

Highlighting the contribution of small industries in the socio-economic growth of the country, Singh said, “Compared to investment made, small industries create more employment opportunities than large industries. They also ensure a more even dispersion of wealth in society. Many MSMEs are doing well in exports and are becoming a part of the global supply chain of the world’s biggest companies. Heavy industries, too, play a big role in the nation’s development, but the country cannot fully progress by ignoring small industries.”

He also lauded 'Laghu Udyog Bharti' as a crucial link between the government and the industry, responsible for identifying and resolving issues faced by small enterprises. Singh expressed optimism that India, with the collective efforts of its industries, will achieve self-reliance and emerge as a global manufacturing hub in the future.

Interestingly, in FY23, the Ministry of Defence was the top procurer of goods and services from MSMEs through the Government e-Marketplace (GeM) portal. During FY23, the ministry procured goods valued at INR 28,732.9 crore, representing a substantial 90.4 per cent increase from the INR 15,090.8 crore of goods and services it had procured in FY22. In the current financial year, the Defence Ministry remained one of the top procurers on GeM with procurement worth INR 18,790 crore till September.

In conclusion, the government's strategic move to reserve 75 per cent of the defence capital acquisition budget for MSMEs reflects its commitment to fostering self-reliance and supporting domestic industries. The substantial increase in procurement by the Ministry of Defence from MSMEs signifies the positive impact of these efforts, strengthening the country's path to self-reliance.