Why defence Ministry's tech development fund cap raised five-fold to Rs 50 cr ?

The TDF scheme supports indigenous development of components, products, systems and technologies by micro, small and medium enterprises (MSMEs), and start-ups. The limit of funding of innovative defense projects under the Technology Development Fund (TDF) has been raised on Wednesday to Rs 50 crore per project, from the present limit of Rs 10 crore. The TDF scheme, executed by the Defense Research and Development Organization (DR DO), supports indigenous development of components, products, systems and technologies by micro, small and medium enterprises (MSMEs), and start-ups. To facilitate increased funding for innovative TDF products, the Union Budget for 2022-23 has reserved 25 per cent of the defense R&D budget for industry, start-ups and academia. “The enhanced funding is in line with the budget announcement, and it will further boost the vision of  self-reliance in defense,” said the Ministry of Defense (Mod) in a statement. The scheme aims to provide a major fillip to the defense manufacturing sector by encouraging the industry to innovate and develop defense technologies in order to place India. “With the enhanced funding, the industry and start-ups will be able to develop more complex technologies for existing and future weapon systems and platforms. Till date, 56 projects have been sanctioned under TDF scheme,” said the Mod. “With increases in funding limits, potent systems will get developed, and bigger companies will get supported along with MSMEs. This will be a massive win-win for all. A clear procurement path after development will mean industry can boldly invest in capabilities,” says Abhishek Jain of Zeus Numeric, a small firm that has won praise for innovation. There are four schemes under which small defense firms can approach the Mod for funding innovative projects: ID EX (Innovation for Defense Excellence);  The TDF aims at developing products for the military, but also for other strategic industries such as the Indian Space Research Organization (ISRO). As with ID EX products, an order to the prime developer benefits all the MSMEs that function in its supply chain. In the decade between 2009-2019, the TDF was allocated Rs 544 crore. If things go as per plan, Zeus would get funding, typically from ID EX Prime, to ease the transition of their innovative product into large-scale manufacturing in large numbers. Meanwhile, an MSME irreverently named Big Bang Boom Solutions won the ID EX challenge for developing “see-through armor.” This allows 360-degree situational awareness to a tank crew by mounting cameras outside the tank, capturing a 360-degree view, and stitching together the separate images from those cameras into a single image through data fusion. “The current funding levels under ID EX are insufficient to support cutting-edge innovation. It allows for optimization of various systems, but not basic fundamental research. For funding projects involving basic research, allocation of Rs 50 crore, which the Mod has just allowed, would be required,” says Praveen Dwarkanath, who runs Big Bang Boom. The government told Parliament on March 25 that it has provided ID EX with budgetary support of Rs 498 crore for the five years from 2021-2026, with the objective of providing financial support to nearly 300 start-ups/MSMEs/individual innovators.