Defence Budget 2024: In the ever-evolving landscape of global geopolitics, the recently unveiled Budget for the Financial Year 2024-25 has set a groundbreaking record with a whopping Rs 6.21 Lakh Crore allocated to the Defence sector. This momentous allocation, constituting 13.04% of the total Union Budget, signals a resolute commitment to bolstering self-reliance and promoting exports.
Unprecedented Defence Budget Surge
The Ministry of Defence (MoD) emerges as the primary beneficiary, securing the highest allocation among all Ministries. The allocated budget for FY 24-25 marks an impressive surge of approximately 18.35% compared to the preceding fiscal year (FY 2022-23) and a commendable 4.72% increase over FY 23-24. Now let’s explore the details of this strong allocation.
Capitalizing on ‘Aatmanirbharta’
A notable portion, 27.67%, of the allocated budget is earmarked for capital expenditure. This financial injection aligns seamlessly with the Long Term Integrated Perspective Plan (LTIPP), steering the modernization drive of the Armed Forces. Significant shortages of capacity will be filled by purchasing fighter aircraft, ships, platforms, drones, unmanned aerial vehicles, and specialized vehicles with the additional funding.
Nurturing Indigenous Defence Production
In a significant move towards self-reliance, the budget explicitly outlines plans to fortify ‘Make in India.’ Key projects include the modernization of the Su-30 fleet, advanced engines for existing MiG-29, and the acquisition of transport aircraft C-295 and missile systems. In order to promote cutting-edge technologies in domestic manufacture, the allocation also supports the Light Combat Aircraft (LCA) MK I IOC/FOC configuration. The Indian Navy’s projects, such as the acquisition of Deck-based fighter aircraft and Submarines, are set to materialize through this substantial budget allocation.
Economic Impact of Domestic Procurement
The budget emphasizes ‘Aatmanirbharta’ by encouraging procurement through domestic sources. As highlighted by the Economic Survey of India 2023, the ship-building sector is expected to experience a multiplier effect, with an infusion of approximately Rs 1.5 Lakh Crore leading to a circulation of Rs 2.73 Lakh Crore in naval ship-building projects.
Fostering Jointness and Flexibility
The Government of India, starting this fiscal year, is actively fostering jointness among the services. To improve financial flexibility, the Ministry of Defence is grouping the demands of the three services into comparable categories of expenditure, like land, aircraft, and aeroengines.
Operational Readiness and Sustenance
A substantial portion of the budget, Rs 92,088 Crore, is dedicated to revenue expenditure for the Armed Forces, excluding salaries. The mid-year review further augmented this allocation by 82%, crossing the landmark of Rs 1 Lakh Crore for the first time. The continued emphasis on this aspect has significantly improved the sustenance and operational readiness of the Armed Forces since FY 2023-24.
Addressing the Veterans: Pension and Welfare
The Defence Pension budget sees an increase to Rs 1,41,205 Crore, marking a 2.17% rise from the previous fiscal year. This allocation will cover monthly pensions for approximately 32 lakh pensioners through SPARSH and other pension disbursing authorities. Simultaneously, the Ex-Servicemen Welfare Scheme (ECHS) witnesses an unprecedented allocation of Rs 6,968 Crore, showcasing a substantial 28% increase from FY 23-24.
Strengthening Border Infrastructure
Amidst the ongoing threat perception at the Indo-China border, the Capital Budget allocation for the Border Roads Organisation surges to Rs 6,500 Crore for BE 2024-25. This reflects a significant 30% increase from FY 23-24 and a staggering 160% increase over FY 2021-22. Improving border infrastructure is a priority since it not only strengthens strategic capabilities but also fosters socioeconomic growth and increases travel to the area.
Empowering Indian Coast Guard
The Indian Coast Guard receives an allocation of Rs 7,651.80 Crore for FY 2024-25, exhibiting a 6.31% increase over the allocation of FY 2023-24. With Rs 3,500 Crore dedicated to capital expenditure, the Indian Coast Guard is poised to acquire advanced patrolling vehicles, electronic surveillance systems, and weapons.
Investing in Defence Research and Development
The Defence Research and Development Organisation (DRDO) witness an increased allocation to Rs 23,855 Crore in FY 2024-25. A significant share of Rs 13,208 Crore is earmarked for capital expenditure, empowering DRDO to delve into fundamental research and collaborate with private entities. The Technology Development Fund (TDF) scheme, with an allocation of Rs 60 Crore, targets new startups, MSMEs, and academia, fostering innovation and niche technology in collaboration with DRDO.
Budget for FY 2024-25 reflects a resolute commitment to fortify India’s defence capabilities, fostering self-reliance, and promoting exports.