Promise of budgetary support for defence innovation

By Financial express

On June 13, Defence Minister Rajnath Singh approved budgetary support of Rs 498.8 crore for the Defence Innovation Organisation (DIO). This will enable DIO to provide funds to nearly 300 aspiring entrepreneurs and 20-odd Partner Incubators (PIs) to undertake R&D and innovation projects. The funds will be released by the Department of Defence Production (DDP) over the next five years

Considering that the budgetary allocations are made annually in the federal budget, the approval given by Rajnath Singh can best be described as the indicative budget for the next five years. The actual allocation of funds to DIO would depend on how much money the finance minister is able to allocate each year for this purpose.

This five-year budget includes Rs 450 crore for funding the projects, Rs 29.6 crore for the PIs and Rs 19.18 crore for the DIO’s internal operations, including administrative and management cost and the expenditure on monitoring and evaluation of projects.

During the current financial year, DIO is expected to be allocated Rs 66.1 crore. It is now known whether the DDP already has sufficient funds from which this amount will be released, or it will now approach the Ministry of Finance for additional allocation.

Incorporated in 2018 under Section 8 of the Company Act, 2013, DIO is a not-for-profit organisation that manages Innovation for Defence Excellence (iDEX) scheme. The aim of this scheme is to create ‘an ecosystem to foster innovation and technology development in Defence and Aerospace by engaging Industries including MSMEs, start-ups, individual innovators, R&D institutes and academia and provide them grants/funding and other support to carry out R&D development which has good potential for future adoption for Indian defence and aerospace needs’.

This nascent organisation is managed by a Board of Directors, with Secretary (DDP) as the Chairman, Additional Secretary as the Chief Executive Officer, and CMDs of Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL), and the MD of Atal Innovation Mission (AIM), as members.

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