The interim Indian defence budget for 2024-2025, presented in February 2024, focused on modernisation, self-reliance, and border infrastructure development. Here are some key points:

Overall Allocation

The interim Union Budget 2024-25 allocated a record over Rs 6.21 lakh crore for the Ministry of Defence representing a 4.72% increase over the previous year’s estimates. This works out to be 13.04% of total (interim FY 2024-25) Union Budget or 4.72% more than FY 2023-24.

Key Components

• Capital expenditure: Rs 1.72 lakh crore – 27.67% of total defence budget.
• Non-salary revenue expenditure: Rs 92,088 crore — 48% higher than FY 2022-23
• Budgetary allocation for Defence pensions increased to Rs 1.41 lakh crore
• Rs 6,500 crore earmarked to strengthen border infrastructure; Rs 7,651.80 crore allocated to Indian Coast Guard;
• Research and development allocation to DRDO enhanced to Rs 23,855 crore

Areas of Focus

Modernisation: A significant portion of the budget is expected to be allocated towards modernising India’s armed forces, including acquiring new equipment and weaponry.

Acquisition of new weapons systems, infrastructure development, and modernisation of existing equipment

Self-reliance: The government’s push for self-reliance in the defence sector could lead to increased funding for domestic research and development (R&D) and indigenous production.

Border infrastructure: Strengthening border infrastructure, particularly along disputed borders with China and Pakistan.

The budget presented by Finance Minister Nirmala Sitharaman in Parliament on February 01, 2024 lays emphasis on the twin objective of promoting self-reliance and exports in the current geopolitical scenario.

The budgetary allocation for Ministry of Defence (MoD) — the highest among all Ministries for FY 24-25 is approx. Rs one lakh crore (18.35%)  higher than the allocation in FY 2022-23 and 4.72% more than FY 23-24. A major share of this will go for capital outlay, 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.

Capital Expenditure on ‘Aatmanirbharta’

Budgetary allocation for capital expenditure for FY 24-25 is in line with the Long Term Integrated Perspective Plan (LTIPP) of the three Services. It is 20.33% higher than the actual expenditure of FY 22-23 and 9.40 % more than the Revised Allocation of FY 23-24 and should facilitate the three Services fill up the much needed demand for state-of-the-art weapons, fighter aircraft, ships, platforms, unmanned aerial vehicles, drones, and all terrain combat vehicles in FY 2024-25.

The emphasis of the budget is to promote ‘Aatmanirbharta’ in Defence. Large portion of the funds allocated will be used for procure domestically manufactured next generation weapon systems. This is expected to have a force multiplier effect, boost the GDP, create employment, ensure capital formation and provide a stimulus to the domestic economy.

The interim budget presented by Nirmala Sitharaman on February 01, 2024 lays emphasis on the twin objective of promoting self-reliance and exports in the current geopolitical scenario. The budgetary allocation for Ministry of Defence (MoD) — the highest among all Ministries for FY 24-25 is approx. Rs one lakh crore higher than the allocation in FY 2022-23 and 4.72% more than FY 23-24

Some of the planned ventures to be funded out of this budget include modernisation of the existing Su-30 fleet along with additional procurement of aircraft, acquisition of advanced engines for existing MiG-29s, acquisition of C-295 transport aircraft and missile systems.

Likewise the Indian Navy projects can expect to acquire deck-based fighter aircraft, submarines, next and generation survey vessels etc.

The Government of India has taken a conscious decision this year onwards to consolidate the demand of the three services for similar items such as Heavy and Medium Vehicles, Aircraft and Aero engines. This should enable the MoD to reappropriate the funds among the three services keeping depending upon the projected demand and inter services priority. This should also ensure effective utilisation of the capital budget and expedite decision making.

Higher allocation for operational readiness

The revenue expenditure (other than salary) allocation of Rs 92,088 crore for the Armed Forces in interim Union Budget 2024-25 seeks to reinforce operational readiness by providing maintenance and support facilities for tanks, armored vehicles, aircrafts and ships. It should also enable procuring of ammunition, mobility of men and material and meet the day-to-day requirement of troops deployment in forward areas and keep the forces always ready to take care of any eventuality.

Higher allocation for Pensions

The interim Union Budget 2024-25 provides for a hike of Rs 1,41,205 crore in terms of Defence pensions which is 2.17% higher than the allocation made in 2023-24. This should benefit about 32 lakh pensioners through SPARSH and other pension disbursing authorities.

Ex-Servicemen Welfare Schemes (ECHS) and healthcare facilities for Veterans

The allocation of Rs 6,968 crore for ECHS Schemes in the interim Union Budget 2024-25 is 28% higher than the allocation for FY 23-24 (Rs 5,431.56 crore). This significantly higher allocation is to take care of Medical Treatment Related Expenditure (MTRE) and bring the gap between ECHS and the CGHS Schemes. This is expected to benefit the ex-servicemen, war veterans, veer naris and their family members.

Strengthening the Border Infrastructure

The interim Union Budget provides for an allocation of Rs 6,500 crore in 2024-25 in light of the continued tension along the Indo-China border. This is 30% higher than FY 23-24 and 160% higher than FY 2021-22. The Government’s commitment to improve the border infrastructure is reflected in the quantum jump in the fund allocation for the Border Roads Organisation apart from promoting strategic infrastructural development and promoting tourism to boost socio-economic development in the far-flung border areas. The projects to be funded out of this allocation include development of Nyoma Air field in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to southernmost Panchayat of India in Andaman and Nicobar Island, 4.1 km strategically important Shinku La tunnel in Himachal Pradesh, and Nechiphu tunnel in Arunachal Pradesh.

Some of the ventures to be funded out of the FY 23-24 interim budget include modernisation of the Su-30 fleet along with additional procurement of aircraft, acquisition of advanced engines for existing MiG-29s, acquisition of C-295 transport aircraft and missile systems. Likewise the Indian Navy projects can expect to acquire deck-based fighter aircraft, submarines, next and generation survey vessels etc

Strengthening the Indian Coast Guard

The budgetary allocation for FY 2024-25 is Rs 7.651.80 crore which is 6.31% higher over the allocation of FY 2023-24. Of this, Rs 3,500 crore is to be incurred only on capital expenditure, adding teeth to the arsenal of the Indian Coast Guard to address the emerging challenges posed in water and provide humanitarian assistance to other nations. The allocation will facilitate the acquisition of fast moving patrolling vehicles/interceptors, advanced electronic surveillance systems and weapons.

Innovation and research in Defence technology  

The budgetary allocation to 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. A major share of this allocation, ie Rs 13,208 crore is allocated for capital expenditure. This will financially strengthen the DRDO in developing new technology with special focus on fundamental research and hand-holding the private parties through Development-cum-production partner. Allocation to Technology Development Fund (TDF) scheme stands out to be Rs 60 crore which is especially designed for new start-ups, MSMEs and academia attracting the young bright minds interested in innovation and developing niche technology in the field of defence in collaboration with the DRDO. The announcement regarding a Rs 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.

On the whole the ‘interim budget’ outlines the vision for a confident, strong and self-reliant ‘Viksit Bharat’. The underlying objective is to give shape to Prime Minister Narendra Modi’s vision to make India a developed nation by 2047.

This Budget is aligned with PM’s ‘Panchamrit Goals’ and strives to make India a five trillion dollar economy by 2027.

–The writer is a seasoned media professional with over three decades of experience in print, electronic, and web media. He is presently Editor of Taazakhabar News. The views expressed are of the writer and do not necessarily reflect the views of Raksha Anirveda