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While the UPA government had passed an interim budget in February 2014, before elections were held to constitute the 16th Lok Sabha, the bulk of discussions centring on the nation's financial allocations have begun thereafter, with most observers keen to follow the first major actions of the new BJP-led government. Changes to the defence budget, as compared to the interim allocations, are minor in monetary terms, being summed up by a Rs 5,000 crore hike to the capital budget, but are highly significant for the message they send out. The revenue budget remains the same Rs 134,412 crore assigned in the interim budget passed earlier this year.
However, to begin with, Finance Minister (presently also Defence Minister) Arun Jaitley decisively signalled a push for indigenisation by handing DRDO its largest ever increase in capital allocation : Rs 9298 crore, up from Rs 5975 crore in the interim budget and Rs 5258 crore in last year's budget. Following this mammoth 60 per cent hike, the entire R&D budget stands at Rs 15,283 crore, granting DRDO's longstanding demands to be allocated funding equivalent to 7-8 per cent of the total defence budget.
In the same vein, the capital allocation for the Ordnance Factory Board (OFB) was doubled, from Rs 530 crore to Rs 1207 crore, with the funds slated to go towards the modernisation of various facilities across India that manufacture...