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Business Standard
2 days ago
- Business
- Business Standard
India should benchmark military spending at 3% of GDP, says EY report
India should consider setting defence expenditure at 3 per cent of gross domestic product (GDP), establishing a non-lapsable defence modernisation fund, and promoting domestic manufacturing, according to a report released by EY on Monday. The June edition of EY's Economy Watch stressed the importance of a forward-looking approach to defence budgeting. Such a strategy, it argued, would help India develop a more resilient and responsive defence infrastructure, better positioning the country to respond to changing geopolitical and technological challenges. Recommendations to strengthen defence readiness The report specifically recommended "benchmarking defence allocations at 3 per cent of GDP", supplemented by the creation of a "non-lapsable defence modernisation fund, and incentivising domestic manufacturing to unlock long-term economic growth multipliers". It also called for improving the efficiency of procurement processes and placing greater focus on defence-related research and development. Decline in defence spending share over time EY noted that India's defence spending as a proportion of GDP has steadily declined from nearly 3 per cent in the early 2000s to just over 2 per cent today. In contrast, the United States and Russia continue to allocate substantially higher shares of their GDP to military expenditure. Modernisation fund could offer fiscal predictability DK Srivastava, chief policy advisor at EY India, said that benchmarking defence spending at 3 per cent of GDP and establishing a dedicated non-lapsable modernisation fund could offer the fiscal predictability needed to invest in advanced technology and bolster domestic defence manufacturing ecosystems. The report referenced the 15th Finance Commission's proposal to create a Modernisation Fund for Defence and Internal Security (MFDIS) — a non-lapsable corpus under the Public Account of India. The fund was intended to be financed through disinvestment proceeds, monetisation of surplus defence land, and voluntary contributions. Although the Indian government had accepted this idea "in principle", the fund has not yet been implemented. The EY report stated that reviving the proposal could provide consistent capital support and insulate critical defence investments from year-to-year fluctuations. According to data released by the Stockholm International Peace Research Institute (SIPRI), India is on course to spend $86 billion in 2025–26. Just around 22 per cent of the annual defence budget for 2025–26 is earmarked for capital procurements of new weapon systems. India's defence spending as a percentage of GDP has decreased from 2.25 per cent in 2014–15 to 1.91 per cent in 2024–25.
Time of India
2 days ago
- Business
- Time of India
India's defence budget outlook: EY report calls for 3% GDP benchmark; permanent fund, R&D push recommended
AI-generated image India may consider setting a military expenditure benchmark at 3 per cent of GDP, creating a permanent defence modernisation fund, and boosting domestic manufacturing, according to the June edition of EY's Economy Watch report released on Monday. The report, quoted by news agency PTI, highlights the need for forward-looking defence budget planning to build a more resilient and agile defence framework that can respond effectively to evolving geopolitical and technological challenges. 'Over the years, India's military expenditure as a share of GDP has gradually declined — from close to 3 per cent in the early 2000s to just over 2 per cent today, whereas countries like the US and Russia continue to allocate significantly higher proportions,' the report noted. To address this gap, EY suggested "benchmarking defence allocations at 3 per cent of GDP, supplemented by the creation of a non-lapsable defence modernisation fund, and incentivising domestic manufacturing to unlock long-term economic growth multipliers." The report also underlined the importance of increasing the capital component of the defence budget, streamlining procurement processes, and giving greater priority to research and development in the defence sector. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like BLI TANI NE +355683329609 | Përjeto luksin në çdo rreze dielli. Reklame nga | Enzo Attini Undo EY India Chief Policy Advisor DK Srivastava said, "Benchmarking defence spending at 3 per cent of GDP and operationalising a dedicated non-lapsable modernisation fund can provide the fiscal predictability required for investing in advanced technology, strengthening domestic defence manufacturing ecosystems, and driving innovation-led procurement." The proposal aligns with an earlier recommendation by the 15th Finance Commission, which called for the creation of a Modernisation Fund for Defence and Internal Security (MFDIS) — a permanent corpus within the Public Account of India. This fund was envisioned to be financed through disinvestment receipts, defence land monetisation, and voluntary contributions. Although the government has accepted the MFDIS proposal in principle, the EY report noted that the fund has yet to be operationalised. Reactivating this proposal, it said, could ensure stable capital support and shield critical defence investments from fluctuations in annual budget allocations. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
3 days ago
- Business
- Time of India
Benchmark military spending at 3% of GDP, create non-lapsable modernisation fund: EY report
India should consider benchmarking military spending at 3 per cent of GDP, creating a non-lapsable defence modernisation fund , besides incentivising domestic manufacturing , an EY report said on Monday. The June edition of EY Economy Watch highlighted the need for a forward-looking defence budgeting strategy, saying this would build a more resilient and responsive defence infrastructure, and make India better equipped to address evolving geopolitical and technological challenges. "Over the years, India's military expenditure as a share of GDP has gradually declined - from close to 3 per cent in the early 2000s to just over 2 per cent today, whereas countries like the US and Russia continue to allocate significantly higher proportions," it said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Remember Him? Sit Down Before You See What He Looks Like Now 33 Bridges Undo The EY report recommended "benchmarking defence allocations at 3 per cent of GDP, supplemented by the creation of a non-lapsable defence modernisation fund, and incentivising domestic manufacturing to unlock long-term economic growth multipliers". Going forward, there is a need to enhance the capital component of the defence budget , streamline procurement processes, and emphasise defence-related research and development. Live Events EY India Chief Policy Advisor, D K Srivastava , said, "Benchmarking defence spending at 3 per cent of GDP and operationalising a dedicated non-lapsable modernisation fund can provide the fiscal predictability required for investing in advanced technology, strengthening domestic defence manufacturing ecosystems, and driving innovation-led procurement." The 15th Finance Commission had proposed the creation of a Modernisation Fund for Defence and Internal Security (MFDIS), a non-lapsable corpus under the Public Account of India, to be financed through disinvestment proceeds, monetisation of surplus defence land, and voluntary contributions. "Although accepted in principle by the government, this fund is yet to be implemented. Reviving the proposal could provide consistent capital support, insulating critical defence investments from year-to-year fluctuations," the EY Economy Watch report said.
Time of India
06-06-2025
- Business
- Time of India
Wharton Executive Education's Chief Financial Officer (CFO) Program – India reimagines financial leadership in India
Rapid growth, driven by technology advancements and a growing fintech sector, are some of the prominent characters in India's growth story. If one is to go by numbers, as per this news report1 that mentions key findings from the EY Economy Watch report, India's economy is expected to grow at 6.5% in 2025-2026. For FY2025, real GDP is estimated at 6.4%, in line with the revised estimates by the National Statistical Office (NSO). India's financial services sector is witnessing growth in the last couple of years. This surge is expected to continue. For instance, India's private wealth management industry also demonstrates potential. India is expected to have 16.57 lakh HNWIs in 20272. With emerging technologies also playing a vital role in this narrative, there is a need for chief finance officers (CFOs) who can lead businesses into the future. Strategic thinking, technical leadership, and end-to-end knowledge of the business have become vital competencies for tomorrow's finance leaders. Closing the gap between finance and strategy is Wharton Executive Education's Chief Financial Officer (CFO) Program – India. Since the Wharton School's inception in 1891, the institute has established a formidable reputation by being at the forefront of business education. It has endeavored to consistently produce leaders who root their decisions in thorough analysis and evidence-based, actionable knowledge. The Wharton School - A pioneer in business education For nearly 120 years, the Wharton School's finance department and research centers have continued to promote innovative research and programs in areas such as investment management, private equity, hedge funds, venture capital, quantitative finance, fintech, financial policy, and regulation. Wharton Executive Education programs stay true to the dynamic times that businesses find themselves in. This particular program has been devised for finance professionals who aspire to transition into strategic leadership roles. This program is a premium financial leadership offering tailored for Indian CFOs, serving global expertise with local relevance. Who is this program for? This program is suitable for the C-suite professional that plays a role in leading and executing financial strategies. This is also for professionals who are involved in investment decisions, strategic planning, and contributing to overall executive-level decision making. This includes existing CFOs, C-suite finance leaders, VPs of finance, financial directors, and similar roles. A holistic learning pedagogy This program utilises a dynamic learning pedagogy that emphasizes experiential and collaborative learning. By incorporating real-world case studies, interactive discussions, and networking opportunities, the program equips participants with the strategic skills essential for navigating India's evolving financial environment. The learning pedagogy of Wharton Executive Education's Chief Financial Officer (CFO) Program – India is designed to enable participants to thrive in the modern financial terrain. The emphasis is on strategic financial leadership built through a multifaceted approach that amalgamates theory with practical application. Here are the key components of this pedagogy: Participants will experience a learning journey that blends practical and theoretical learning to respond to India's need for future-first CFOs. They can learn at a comfortable pace with a weekly commitment of four to six hours. They will learn from renowned Wharton faculty such as David Wessels, PhD; Mary-Hunter McDonnell, JD, PhD; and Rahul Kapoor, PhD. This esteemed faculty will be drawing from their pool of rich experiences to prepare the next generation of finance leaders. Two India immersions (2+3 days) will also enable an exchange of cross-industry knowledge and help in building transformative partnerships and collaborations with like-minded CXOs. With global case studies, they will be able to understand how out-of-the-box solutions can be applied to India's unique challenges. Upon successful completion of the program and subsequent Open Enrollment Programs, subject to further qualification criteria and additional tuition, participants have a pathway to apply for Wharton alumni status via the Advanced Finance Program (AFP). They also get an invaluable digital certificate from Wharton Executive Education. Key learning outcomes of the program Apart from the fact that program participants will get to experience the Wharton impact on their career trajectories, here are some takeaways that will further their career progress: Reframe the CFO role as a transformational force Lead change initiatives Champion a data-driven and AI-enabled culture Optimize capital deployment and valuation models Navigate complex M&A landscapes and alliances This program is uniquely positioned to empower the financial leaders of the future. It brings together rigorous academic principles with practical, real-world applications. As India continues to move forward, the demand for innovative CFOs has never been greater. This program fosters a rich understanding of financial management and also polishes critical thinking, collaboration, and strategic foresight key to ushering organizational growth. Key details: Eligibility: A minimum of 10 years of work experience and fluency in spoken as well as written English Program fee: INR 9,15,000 + GST Program Start Date: September 2025 To know more about this program, click here. Source 1. 2.
Fibre2Fashion
30-05-2025
- Business
- Fibre2Fashion
India's GDP growth expected to moderate in FY26: EY Economy Watch
India's gross domestic product (GDP) growth is expected to slow down in this fiscal due to both global and domestic factors, according to EY's latest Economy Watch report, which said the country is likely to remain one of the fastest-growing large economies despite the expected moderation. The factors leading to a cautious outlook include problems in supply chains, recent US tariffs and general uncertainty in global trade and geopolitics. India's GDP growth may slow down in this fiscal due to both global and domestic factors, including supply chain problems, US tariffs and general uncertainty in global trade and geopolitics, an EY report said. The country is likely to be one of the fastest-growing large economies despite the likely moderation due to strong domestic demand, lower inflation and supportive monetary policies, it noted. The country's growth will be due to strong domestic demand, lower inflation and supportive monetary policies that may encourage private investment, it noted. The country's government may have to carefully mix monetary and fiscal policies to maintain growth in the near future, EY cautioned. "On the monetary front, a continuation of the ongoing rate cut cycle could provide support to consumption and investment. On the fiscal side, reviving the momentum in public investment, especially GoI's [government of India] capital expenditure, which witnessed a moderation in growth in FY25, will be important to sustain economic activity," EY added. The country's consumer price index-based inflation eased to a 69-month low of 3.2 per cent in April this year, while manufacturing purchasing managers' index increased to a ten-month high of 58.2 in the month. Merchandise trade deficit increased to a six-month high of $26.4 billion in April, owing to a sharp increase in growth in imports. Fibre2Fashion News Desk (DS)
