The percentage of procurement from domestic defence manufacturers stood at 63.6 per cent in 2020-21 as against 54 per cent in 2018-19, the panel said in a report tabled in Parliament

A parliamentary panel on Thursday complimented the defence ministry for its "synergised efforts" to realise the objective of ensuring self-reliance in military hardware. The Standing Committee on Defence also noted that the expenditure on procurement from domestic sources has witnessed an increasing trend since 2018-19.

The percentage of procurement from domestic defence manufacturers stood at 63.6 per cent in 2020-21 as against 54 per cent in 2018-19, the panel said in a report tabled in Parliament.

Referring to the gap between projects of budgetary allocations and actual outlay in the defence budget, it recommended formulation of a method for pragmatic budgetary projections.

The committee observed that the tendency for greater projections in anticipation of higher allocation of funds at revised estimates stage is not desirable.

"The committee is happy to note that synergised efforts are being taken for realisation of the objective of 'Aatmanirbhar Bharat' (self-reliant India) in defence sectors," the report said.

The committee, headed by Jual Oram, expressed happiness over efforts undertaken to take up indigenisation of equipment for future projects. The report said the committee has been apprised that there are some critical components that are not indigenously produced for various unavoidable reasons. "In this regard, the committee hopes that the indigenisation cell constituted in defence public sector undertakings (DPSUs) will be able to successfully indigenize some of the critical equipment/items required for warships and submarines," it said.

The committee also noted that the cumulative order book status of the nine DPSUs, as on February, 2022, stood at Rs 2,48,487 crore.

"After examining the data furnished by the ministry regarding order book status of each DPSU, it is inferred that out of the nine DPSUs, Hindustan Shipyard Limited (HSL) and Mishra Dhatu Nigam Ltd (MIDHANI) have considerably low order book value when compared to the other DPSUs," the report said.

It said the order book position of Hindustan Aeronautics Ltd as of December 31, 2022 was Rs 83,707 crore.

This includes platform manufacturing order for Light Combat Aircraft (LCA) Tejas Mk1, LCA MK1A, and Light Combat helicopters.

The report also noted that there is around 17 per cent shortage of manpower in Coast Guard Organisation vis-à-vis sanctioned strength.

The committee also observed that there was a gap of around Rs 1 lakh crore in the demand by the armed forces and the actual allocation made in the defence budget for 2022-23.

The defence ministry conveyed to the panel that greater projections at budget estimates stage become a justification for enhanced allocation at revised estimates stage, adding additional funds are allocated by the finance ministry contingent upon spending capacity of the ministries/organisations.

"The committee also noted the assurance of the Ministry of Defence that operational preparedness of the defence services will not be affected and the Ministry of Finance will be approached for additional allocation of funds, if needed, at revised estimates stage," the report said.

"The committee, in this context, is of the considered view that in spite of the ministry's affirmation that operational preparedness of the services will not be compromised due to want of funds and the additional funds, if needed, will be sought at revised estimates stage, the huge mismatch between projected and allocated funds is a cause of concern," it said.

The committee said the tendency for greater projections in anticipation of greater allocation of funds at revised estimates stage is not desirable as it gives the impression of a huge gap between required and allocated defence budget.

"Therefore, the committee recommends that a method may be formulated by the Ministry of Defence in consultation with the Ministry of Finance for pragmatic budgetary projections," the report said.