Thursday, 7 May 2015


When the government announced a Rs 100-crore fund in last year’s budget for defence technology development, industry representatives from public sector undertakings, private industries and SMEs approached the Defence Ministry demanding that the allotment be raised to Rs 1,000 crore. A year on, any such announcement is yet to come— thanks to absence of schemes to direct the funds to—as was the case with the previous government.

“Last year, Rs 100 core was earmarked (for technology development fund). When we requested that Rs 100 crore will not be enough and asked for Rs 1000 crore, the Raksha Mantri told us to spend Rs 100 crore first and only then Rs 1000 crore would be given,” former HAL chairman R K Tyagi told this reporter.

While Tyagi said “not even a rupee” of the fund was utilised and all the money had to be “surrendered”, Ministry sources said the fund was just announced and never really used, as has has been the case ever since the creation of the defence technology development head in 2011.

While announcing the fund in last June’s budget, the government had said, “An initial sum of Rs 100 crore has been allocated to set up a technology development fund to provide necessary resources to public and private sector companies, including SMEs as well as academic and scientific institutions to support research and development of defence systems that enhance cutting-edge technology capability in the country”.

Making this announcement while presenting the general budget in Lok Sabha, Finance Minister Arun Jaitley had said “in the year 2011, a separate fund was announced for this purpose but beyond the announcement, no action was taken”.

The action taken report of the Finance Ministry in this year’s budget says that “consultation with stakeholders is on and draft cabinet note is being prepared”.

Former financial adviser (Acquisition), Ministry of Defence, Amit Cowshish said: “The head for this fund was created in 2011 when the defence procurement policy was released. But money for the same was never announced…This year, though the fund was announced, there exists no mechanism to channelise this money towards the setting up of the resources.”

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