Finance Minister Increases Allocation For Defence Sector To Rs 4.78 Lakh Crore, | Finance Minister Increases Allocation For Defence Sector To Rs 4.78 Lakh Crore,


Budget 2021 Increases Allocation For Capital Defence Expenditure To 18.75%

Defence budget allocation of INR 1350.60 bn for capital expenditure and INR 2120.27 bn for revenue expenditure ► Increase in budget allocation for capital defence expenditure by 18.75% over 2020- 21 (BE) ► Policy for Strategic Disinvestment in Defence ► To increase investment space for private sector and minimize presence of Central Public Sector Enterprises (CPSEs), defence is one of the identified strategic sector for disinvestment ► Policy to result in minimal presence of CPSEs in the defence sector and remaining CPSEs to be privatized or merged or subsidiarized with other CPSEs or closed ► Tax incentives introduced to promote domestic aircraft leasing market ► Defence Acquisition Program (DAP) 2020 introduced “Leasing” as an acquisition category in addition to “buy” and “make” category ► In Oct 2020, aircraft leasing was notified as an eligible financial product to be transacted in International Financial Services Centre (IFSC) ► Proposal for income-tax exemption on royalty income received on aircraft lease by non-resident lessors from eligible IFSC units engaged in Aircraft leasing ► Reduction in custom duty rate for domestic manufacturing of aircrafts or its parts by public sector units ► To reduce the cost of raw materials and inputs, basic custom duty has been reduced from 2.5% to 0% for components or parts, including engines, for manufacture of aircrafts by public sector units of Ministry of Defence



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