NEW DELHI: Amidst the current geopolitical scenario and the tensions along the northern border with China, the defence budget allocated on Thursday to the Ministry of Defence has been increased by Rs 28003.21 cr. With this, the Defence Budget has touched Rs 6, 21,540.85 crore in the Financial Year 2024-25. This comes out to be 13.04% of the interim Union Budget presented by Finance Minister Nirmala Sitharaman in Parliament.
The Ministry of Defence in a statement said this allocation for Financial Year (FY) 24-25 is higher by approximately one lakh crore (18.35%) than the allocation for FY 2022-23 and 4.72% more than the allocation of FY 23-24.
The Defence Budget for 2023-24 was Rs 5,93,537.64 lakh crore, an increase of around Rs 68,834 crore. It was Rs 5,25,166 cr for the year 2022-23.
Of the allocation this year, 27.67% goes to capital, 14.82% for revenue expenditure on sustenance and operational preparedness, 30.68% for Pay and allowances, 22.72% for defence pensions and 4.11% for civil organisations under MoD, the statement added. The Capital budget is spent on adding new weapons, systems and equipment.
The allocation to the Ministry of Defence (MoD) continues to be the highest among the Ministries.
Budgetary allocation for capital expenditure in Defence for FY 24-25 is Rs 1.72 lakh crore which is 20.33% higher than the actual expenditure of FY 22-23 and 9.40 % more than the Revised Allocation of FY 23-24. The allocation is in line with the Long Term Integrated Perspective Plan (LTIPP) of the three Services aimed to fill the critical capability gaps through the modernisation of the Armed Forces by materialising some big-ticket acquisitions in FY 2024-25.
Capital Outlay in FY 2023-24 was increased by Rs 10, 230.39 crore, which is a rise of 6.7%, to Rs 1,62,600 (was Rs 1,52,369.61 in 22-23). The same was increased by about 9.8% for the year 2022-23.
As per the MoD, 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, Drones, Specialist Vehicles etc.
Planned modernisation of the existing Su-30 fleet along with additional procurement of aircraft, acquisition of advanced engines for existing MiG-29, acquisition of transport aircraft C-295 and missile systems will be funded out of the budget being allocated.
Apart from this, to take the initiative of 'Make in India' further the LCA MK-I IOC/FOC configuration will be additionally funded to ensure state-of-the-art technology in domestic production. The Indian Navy projects such as the acquisition of Deck-based fighter aircraft, Submarines, generation survey vessels etc. will all materialise through this allocation. The sizable allocation under capital is centred around promoting 'Aatmanirbharta' in Defence. A large portion of the allocation will be utilised for procurement through domestic sources to provide domestically manufactured next-generation weapon systems to the country which will have a multiplier effect on the GDP, create employment, ensure capital formation and provide a stimulus to the domestic economy.
Allocation to the Armed Forces for revenue expenditure (Other than Salary) meant for sustenance and operational commitment for FY 24-25 is Rs 92,088 crore.
This year onwards, the Government of India has taken a conscious call to foster jointness among the services by consolidating the demand for the three services into similar items of expenditure such as Land, Aircraft and Aeroengines, Heavy and Medium Vehicles etc. This will bring flexibility in financial management by enabling the MoD to reappropriate the fund among the three services keeping in view the inter-services priority. This mechanism will also expedite decision-making and ensure better utilisation of the capital budget.
Total Budgetary allocation on account of Defence pensions is Rs 1,41,205 crore which is 2.17% higher than the allocation made during 2023-24. It will be incurred on monthly pension to approx. 32 lakh pensioners.
The total allocation to the Ex-Servicemen Welfare Scheme for FY 2024-25 is 28% higher than the allocation for FY 23-24 (From Rs 5,431.56 crore to Rs 6,968 crore).
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.
