New Delhi: The interim defence budget for 2024-25 has been hiked marginally by 4.72 percent when compared to budgetary estimates this fiscal. However, a comparison with the revised estimates shows a contraction of 0.38 percent.
According to the budget estimates that Union Finance Minister Nirmala Sitharaman read out Thursday, the defence budget accounted for 13.04 percent of the total expenditure this fiscal as compared to 13.8 percent in the year before.
The total outlay in the interim budget of 2024-25 was 2.09 percent of the total GDP compared to 2.17 percent in this fiscal.
In terms of pure numbers, the total defence budget for 2024-25 stood at Rs 6,21,540.85 lakh crore (Rs 6.2 lakh crore) as compared to the Rs 5.93 lakh crore in budgetary estimates for this fiscal.
However, the revised estimates put the defence budget at Rs 6.23 lakh crore and hence the new numbers for the next fiscal are a negative increase.
When it comes to the capital budget, last year’s budgetary estimates stood at Rs 1.62 lakh crore but were revised to 1.57 crore as the military was not able to spend the allocated amount.
The interim Budget earmarks Rs 1.72 lakh crore for capital expenditure, which will towards the procurement of modern systems for the armed forces.
Budget figures show that both the Army and the Navy have failed to spend the full amount allocated to them. However, the IAF managed to spend more than what it was allocated.
When it comes to the revenue budget — the allocation that takes care of pay and allowances besides sustenance and operational preparedness — the military spent Rs 28,000 more than what it was allocated.
Revenue spending includes procuring ammunition, mobility of resources, movement of personnel, catering to the day-to-day expenditure of the Armed Forces in strengthening the deployment in forward areas, and keeping the forces always ready to take care of any eventuality.
While the budgetary expenditure for revenue was Rs 2.70 lakh crore, the actual revised numbers stood at Rs 2.98 lakh crore. For the next fiscal, Sitharaman has allocated Rs 2.82 lakh crore.
When it comes to pensions, the budget allocated for 2024-25 stands at Rs 1.41 lakh crore — less than revised estimates of Rs 1.42 lakh crore for this fiscal.
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What the numbers say
Of the 6.2 lakh crore allocated to defence in the interim budget, 27.67 percent goes to capital, 14.82 percent to revenue expenditure on sustenance and operational preparedness, 30.68 percent to pay and allowances, 22.72 percent for defence pensions and 4.11 percent for civil organisations under MoD.
In a statement, the Ministry of Defence said budgetary allocation for capital expenditure in Defence for FY 24-25 is Rs 1.72 lakh crore — 20.33 percent higher than the actual expenditure of FY 22-23 and 9.40 percent 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 modernisation of the Armed Forces by materialising some big-ticket acquisitions in FY 2024-25, it said.
The planned acquisition for the next fiscal includes 12 additional Su-30 MKIs, upgrading the process of about 100 fighters, 26 Rafale Marine aircraft, and three additional Scorpene submarines, among others.
Total budgetary allocation on account of defence pensions is Rs 1,41,205 crore, which is 2.17 percent higher than the allocation made during 2023-24.
Border infrastructure gets more funding
The defence ministry said that in light of the “continued threat perception faced at the Indo-China border”, the capital budget Border Roads Organisation (BRO) has increased.
The allocation for BE 2024-25 is Rs 6,500 crore, which is 30 percent higher than the allocation for FY 23-24 and 160 percent higher than the allocation for FY 2021-22.
Projects such as the development of Nyoma Airfield in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to the most southern 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, the ministry said.
DRDO sees marginal rise
The budgetary allocation to Defence Research and Development Organisation (DRDO) has been an insignificant increase to Rs 23,855 crore in FY 2024-25 from Rs 23,263.89 crore in FY 2023-24.
Of this allocation, a major share of Rs 13,208 crore is allocated for capital expenditure, the defence ministry said, adding that this will financially strengthen the DRDO in developing new technology with a 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, the ministry said. The scheme is designed for new start-ups, MSMEs, and academia to attract those interested in innovation and developing niche technology in the field of defence in collaboration with the DRDO.
(Edited by Uttara Ramaswamy)
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