New Delhi: In a major push to improve efficiency and accelerate defence procurement, the government on Thursday announced that it has significantly enhanced the delegation of financial powers across the armed forces, enabling faster decision-making and smoother execution of contracts.
The revised framework is expected to support procurement exceeding Rs 1.25 lakh crore through the revenue route, in line with current budgetary allocations.
Defence Minister Rajnath Singh released the revised Delegation of Financial Powers for the Defence Services in New Delhi on June 04.
The updated structure covers medical and works projects and introduces major enhancements aimed at strengthening operational efficiency at the field level.
According to the government, financial powers have been increased by up to 100 per cent, and in some cases more than doubled, allowing field commanders greater autonomy in taking swift decisions.
“This would further strengthen the operational efficiency of field commanders, and lead to faster conclusion of contracts and execution of projects,” the ministry of Defence said.
A key highlight of the revision is the significant expansion of financial authority for indigenisation and research and development within the military ecosystem.
These powers have been doubled with the objective of boosting Aatmanirbharta in defence and reducing dependence on foreign original equipment manufacturers.
The revised framework also includes a 100 per cent increase in the ceiling for urgent operational requirements, along with enhanced special financial powers for Army, Air Force, and Naval commanders.
In addition, new provisions have been introduced to promote joint service procurement, allowing lead services to execute purchases with higher delegated authority than earlier norms.
The government has also introduced several new competent financial authorities to decentralise procurement of goods and services, further streamlining the decision-making structure within the defence establishment.
“Financial powers were last notified in 2021. The revision was necessitated due to the expansion in force level and to cater to the increased expenditure on operations and sustenance vis-à-vis the increase in budgetary allocation,” the ministry mentioned.
