Defence budget was on Thursday increased to Rs 6.21 lakh crore for 2024-25 in a modest hike of 4.72 per cent from last year’s allocation of Rs 5.25 lakh crore amid India’s continuing border row with China in eastern Ladakh as well as concerns over evolving security situation in the strategic waterways.
In a landmark move ahead of the 2024 Lok Sabha elections, Finance Minister Nirmala Sitharaman disclosed the allocation of a staggering Rs 6.21 lakh crore for India’s Ministry of Defence during the Interim Budget presentation in Parliament. This marks a 4.3% increase from the previous year, constituting a substantial portion of the Union Budget at 13.04%.
In the interim Union budget, Finance Minister Nirmala Sitharaman also announced plans to roll out an ambitious scheme for “deep-tech” technologies in the military domain.
A total of Rs 1.72 lakh crore was set aside to the military for capital expenditure that largely includes purchasing new weapons, aircraft, warships and other military hardware.
The defence ministry said, “The announcement regarding a rupees one lakh crore corpus for deep-tech for long term loan to tech-savvy youth/companies and the tax advantage to the start-ups will give further impetus to innovation in the defence sector.”
“In the current geopolitical scenario and with the twin objective of promoting self-reliance and exports, the Defence Budget has touched Rs 6.21 lakh crore in the Financial Year 2024-25. This comes out to be 13.04% of the total Union Budget, which was presented by Finance Minister Nirmala Sitharaman,” the Ministry of Defence said.
Defence Scenario in the Budget
The allocation for capital expenditure for 2024-25 in the defence budget is 20.33 per cent higher than the actual expenditure of 2022-23 and 9.40 per cent more than the revised estimate of 2023-24.
“In the current geopolitical scenario and with the twin objective of promoting self-reliance and exports, the defence budget has touched Rs 6,21,540 crore in the financial year 2024-25,” the defence ministry said.
“This comes out to be 13.04 per cent of the total Union budget,” it added.
The total revenue expenditure has been pegged at Rs 4,39,300 crore that included Rs 1,41,205 crore for defence pensions, Rs 2,82,772 crore for defence services and Rs 15,322 crore for the ministry of defence (civil).
A total of Rs 6,500 crore has been earmarked to strengthen border infrastructure while Rs 7,651 crore was set aside for the Indian Coast Guard.
The allocation to the DRDO has been pegged at Rs 23,855 crore.
The enhanced budgetary allocation will facilitate in equipping the Armed Forces with state-of-the-art niche technology lethal weapons, fighter aircraft, ships, platforms, unmanned aerial vehicles and drones, it said.
It said the planned modernisation of the existing Su-30 fighter fleet along with additional procurement of aircraft, acquisition of advanced engines for existing MiG-29 jets, acquisition of transport aircraft C-295 and missile systems will be funded out of the budget.
Apart from this, to take the initiative of ‘Make in India’ further, the Light Combat Aircraft MK’?I IOC/FOC configuration will be additionally funded to ensure state-of-the-art technology in domestic production.
The Indian Navy’s major projects such as acquisition of deck-based fighter aircraft, submarines, next generation survey vessels will all materialise through this allocation, the ministry said.
Dr Laxman Kumar Behera, associate professor at Special Centre for National Security Studies at the Jawaharlal Nehru University, described the overall allocation under the defence budget as modest which is reflective of the government’s priorities for the military.
“The allocations did not show any lack of commitment to the armed forces,”.
Dr Behera also described as a “healthy sign” the increase of Rs 10,000 crore in the outlay under capital expenditure.
Strategic Move with the Numbers
In the capital outlay for defence services, Rs 40,777 crore has been set aside for aircraft and aero engines while an amount of Rs 62,343 crore was allocated for “other equipment”.
An outlay of Rs 23,800 crore has been made for naval fleet and Rs 6,830 crore for naval dockyard projects.
The allocation on account of defence pensions is Rs 1,41,205 crore which is 2.17 per cent higher than the outlay made during 2023-24.
In the budget for 2023-24, the capital outlay for the Indian Air Force was the highest at Rs 57,137.09 crore that included Rs 15,721 crore for procurement of aircraft and aero engines and Rs 36,223.13 crore for other equipment.
The revenue expenditure for the Army has been pegged at Rs 1,92,680 crore for 2024-25 while the Navy and the Indian Air Force have been allocated Rs 32,778 crore and Rs 46,223 crore respectively.
A pivotal aspect of this year’s defence budget is the introduction of a groundbreaking scheme by Finance Minister Sitharaman. This initiative aims to fortify DeepTech technologies for defence purposes, aligning with the pursuit of ‘atmanirbharta’ (self-sufficiency) within India’s defence forces.
Capital Acquisition and Strategic Allocation
The Ministry of Defence provided a detailed breakdown, with Rs 1.72 lakh crore, roughly 27% of the total defence budget, allocated for capital acquisition. Additionally, significant funds are allocated to Armed Forces revenue expenditure (excluding salary), Defence pensions, strengthening border infrastructure, Indian Coast Guard, and the Defence Research and Development Organisation (DRDO).
Indo-China Border Allocation
In light of the continued threat perception faced at the Indo-China border, there continues a jump in the Capital Budget allocation to the Border Roads Organisation.
The allocation for BE 2024-25 is Rs 6,500 crore, which is 30% higher than the allocation for FY 23-24 and 160% higher than the allocation for FY 2021-22. This indicates the commitment of the Government to improve border infrastructure.
The financial provision made during the budget this year, will, apart from promoting strategic infrastructural development in the border areas, also boost socio-economic development in that region along with promoting tourism.
Projects such as the development of Nyoma Airfield in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to the southernmost Panchayat of India in Andaman and Nicobar island, 4.1 km strategically important Shinku La tunnel in Himachal Pradesh, Nechiphu tunnel in Arunachal Pradesh and many other projects will be funded out of this allocation.
Allocation to the Indian Coast Guard (ICG) for this FY 2024-25 is Rs 7.651.80 crore which is 6.31% higher than the allocation for FY 2023-24.
The budgetary allocation to the Defence Research and Development Organisation (DRDO) has been increased to Rs 23,855 crore in FY 2024-25 from Rs 23,263.89 crore in FY 2023-24.
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