By Shubhangi Palve
With the backdrop of escalating global conflicts such as the Russia-Ukraine war, the Israel-Hamas war, ongoing tensions between China and Taiwan, and the strategic rivalry among major powers in the Indo-Pacific region, India has decided to increase its defence budget.
In her seventh Union Budget presentation, Finance Minister Nirmala Sitharaman announced an allocation of Rs 6.21 lakh crore (approximately USD $75 billion), which constitutes 12.9% of the total budget for FY 24-25. This allocation is the largest among all the ministries.
India’s defence budget for 2024-25 saw a minor hike of Rs 500 crore over the interim budget figures of Rs 6.21 lakh crore announced in February this year.
Since the first term of the Narendra Modi government, the defence budget has surged by over 171%, from ₹2.29 lakh crore allocated in 2014-15.
Capital Acquisition
In the current defence budget, ₹1.72 lakh crore is set aside for capital acquisition, and ₹92,088 crores is allocated for sustenance and operational readiness to strengthen the Armed Forces’ capabilities.
Although the government did not specify the expenditure plan for the defence capital budget for this fiscal year, the interim budget indicated that funds would be allocated for the modernization of the existing Su-30 fleet, additional aircraft procurement, acquisition of advanced engines for the MiG-29, purchase of C-295 transport aircraft, and missile systems. It also mentioned that Navy projects, including the acquisition of deck-based fighter aircraft, submarines, and next-generation survey vessels, will be funded through this allocation.
Strengthening Domestic Capacity
The Ministry of Defence has allocated 75% of the modernization budget, totalling ₹1,05,518.43 crore, for procurement from domestic industries this fiscal year. This is expected to have a multiplier effect on GDP, boost employment, and drive capital formation, thereby stimulating the economy.
Defence Pensions
The budget includes ₹1.41 lakh crore for defence pensions, a 4.79% increase from the previous fiscal year’s ₹5.94 lakh crore, which will cover monthly pensions for approximately 32 lakh pensioners.
Similar to the interim budget, the defence budget for 2024-25 does not disclose the specific capital budget allocations for the Army, Navy, and Air Force. This marks a shift from previous years, where such details were publicly available.
Additional Allocation for Innovation in Defence
While maintaining the allocation made to the Ministry of Defence during the interim budget, the government has made an additional allocation of Rs 400 crore for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme.
Border Roads Organisation
In the context of increased infrastructure development in border areas over the past three years, the budget for the Border Roads Organisation (BRO) has been increased by 30% to ₹6,500 crore this year. This allocation will fund projects such as the development of the Nyoma Airfield in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to the southernmost panchayat of India in the Andaman and Nicobar Islands, the 4.1-km-long Shinku La tunnel in Himachal Pradesh, the Nechiphu tunnel in Arunachal Pradesh, and other border initiatives.
Coast Guard
The Indian Coast Guard (ICG) has been allocated ₹7,651.8 crore, a 6.31% increase from the 2023-24 allocation. Of this, ₹3,500 crore is dedicated solely to capital expenditure, intended for the acquisition of fast-moving patrol vehicles, interceptors, advanced electronic surveillance systems, and weapons.
Meanwhile, In The Neighbourhood Watch…
How does India stack up against its neighbours?
China, the dragon next door, is breathing fire with a defence budget of 1.66554 trillion yuan ($231.36 billion) in 2024. That’s the ninth year in a row they’ve cranked up the heat, economic slowdown be damned.
Pakistan allocated P 2.12 trillion ($6.15 billion) for its armed forces in 2024, up 17.6% from the previous year. This is the second-largest increase in six years, though major military acquisitions and nuclear and missile program funding are reportedly hidden in a classified budget line, according to Dawn News.
While India’s defence budget pales in comparison to China’s massive military spending, it significantly outpaces Pakistan’s official figures. This delicate balance of power in South Asia continues to evolve, with each nation vying for strategic advantage.
India bolsters its defence capabilities with this substantial budget allocation, it’s clear that the nation is taking decisive steps to secure its position on the global stage. The increased defence spending not only aims to enhance India’s military preparedness but also serves as a catalyst for economic growth through its focus on indigenous production. The significant investment in military modernization, local defence production, and border infrastructure underscore India’s dedication to tackling the complex security challenges of the 21st century.