Defence gets Rs 6.22 lakh-cr budget, minor hike in modernisation allocation

The defence budget saw a hike of over 44% from 2019-20 when the Narendra Modi government assumed its second term in office, and an increase of over 171% from Rs 2.29 lakh crore allocated in 2014-15 during the Modi government’s first term in office.

The military modernisation budget for the three defence services for 2024-25 stands at Rs 1.72 lakh crore, a hike of over 6% from Rs 1.62 lakh crore allocated in the previous fiscal.

Like in the interim budget, the defence budget for 2024-25 did not make public the individual capital budgetary allocations for the Army, Navy and the Air Force, a departure from the norm in the previous years.

The ministry had earlier said this was aimed at fostering jointness among the services by consolidating the demands of the three services into similar items of expenditure such as land, aircraft and aero engines, heavy and medium vehicles among others.

As per sources, the limited hike in the capital budget for defence is due to fewer new contracts signed by the Armed Forces and certain slippages in scheduled payments and deliveries. The revised estimates of the capital budget for 2023-24 at Rs 1.57 lakh crore was lower than the Rs 1.62 lakh crore allocated in that fiscal, reflecting this as well.

Defence Minister Rajnath Singh congratulated the Finance Minister for presenting an “excellent and outstanding budget, which will help in moving towards making a prosperous and self-reliant Viksit Bharat”. “Inspired by PM Shri Narendra Modi’s vision of Inclusive and fast paced Development this Budget will accelerate India’s economic transformation,” Singh posted on X.

Congratulations to Finance Minister Smt. @nsitharaman for presenting an excellent and outstanding full year Budget for FY 2024-25 which will help in moving towards making a prosperous and self-reliant ‘Viksit Bharat’. Inspired by PM Shri @narendramodi vision of Inclusive and…

— Rajnath Singh (@rajnathsingh) July 23, 2024

In a statement, the Defence Ministry said its allocations are the highest among the ministries. An additional allocation to the tune of Rs 400 crore has been made for innovation in defence through Acing Development of Innovative Technologies with iDEX (ADITI) scheme, under which the Defence Ministry engages with “start-ups/MSMEs and innovators to develop Def-Tech solutions and supply the Indian military with innovative and indigenous technological solutions”.

While the government did not list out the expenditure plan for the defence capital budget for this fiscal, during the interim budget it had said that modernisation of 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 it.

It also mentioned that Navy projects such as acquisition of deck-based fighter aircraft, submarines and next generation survey vessels will materialise through this allocation.

The overall revenue budget for defence, which includes pay and allowances for the Armed Forces and allocations for stocking up on fuel, ammunition and maintenance of assets through procurement of critical spares and other capabilities, saw a raise at Rs 2.82 lakh crore from Rs 2.7 lakh crore in the previous fiscal. This also includes an allocation of over Rs 6,000 crore towards the Agnipath scheme under the three services.

However, the revenue expenditure (other than salary) which is meant for sustenance and operational commitment stands at Rs 92,088 crore.

Some other highlights of the defence budget include a 30% hike in the budget of Border Roads Organisation to Rs 6,500 crore this year in the backdrop of a spurt in infrastructure development in the border areas in the last three years.

Projects such as development of Nyoma Airfield in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to southernmost panchayat of India in Andaman and Nicobar Islands, the 4.1-km-long Shinku La tunnel in Himachal Pradesh, Nechiphu tunnel in Arunachal Pradesh and other border projects will be funded out of this allocation.

Allocation to the Indian Coast Guard (ICG) for 2024-25 is Rs 7,651.8 crore, which is 6.31% higher over the allocation of 2023-24. Of this, Rs 3,500 crore is to be incurred only on capital expenditure to facilitate acquisition of fast-moving patrolling vehicles/interceptors, advanced electronic surveillance system and weapons.

The total allocation to Ex-Servicemen Welfare Scheme for 2024-25 at Rs 6,968 crore is 28% higher than the previous fiscal. The budgetary allocation to Defence Research and Development Organisation has been increased to Rs 23,855 crore in 2024-25 from Rs 23,263.89 crore in the previous fiscal.