Budget 2024: Govt allocates Rs 6.21 lakh crore for Defence in new Deep Tech plan
In the Interim budget for 2024-25, India has allocated Rs 6.21 lakh crore for defense spending, affirming that the crucial sector maintains the highest allocation among all ministries. The allocated amount reflects a 4.72 percent increase compared to the financial year 2023-24, as stated by the defense ministry. However, it is worth noting that the defense budget is slightly lower (0.37%) than the revised estimates of the previous year, according to budget documents.
In her budget speech, Finance Minister Nirmala Sitharaman also announced a new scheme to strengthen deep tech in the defence sector. This year’s defence budget accounts for 1.89 percent of the country’s projected gross domestic product (GDP) for 2024-25. The budget includes a revenue expenditure of Rs 2.82 lakh crore, capital outlay of Rs 1.72 lakh crore and pension outlay of Rs 1.41 lakh crore. The capital outlay for the modernization of the armed forces is 9.39 percent higher than last year’s revised estimates and 5.78 percent more if compared to the budget estimates for 2023-24. India is modernizing its military with fighter jets, helicopters, warships, tanks, artillery guns, rockets and missiles, unmanned capabilities and other combat systems.
“In the current geopolitical scenario and with the twin objective of promoting self-reliance and exports, the defence budget has touched Rs 6,21,540.85 crore in the FY 2024-25. This comes out to be 13.04 percent of the total budget", the defence ministry said in the statement. The enhanced capital outlay is aimed at filling critical capability gaps through modernization, the statement said, adding that it will also help boost self-reliance in the sector. "Planned modernization of the existing Sukhoi-30 fleet along with additional procurement of aircraft, acquisition of advanced engines for MiG-29s, acquisition of C-295 transport aircraft, missile systems, deck-based fighters and submarines will be funded out of the budget", it said.
The defense budget for India in the previous year amounted to Rs 5.93 lakh crore, with a capital outlay of Rs 1.62 lakh crore. The revised estimates later indicated an increased figure of Rs 6.23 lakh crore, incorporating a capital allocation of Rs 1.57 lakh crore. "A new scheme will be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta'", Finance Minister Nirmala Sitharaman said in her Budget speech. Details of the scheme were not immediately available.
The new scheme will propel indigenous innovation and the advancement of cutting-edge technologies such as artificial intelligence, quantum computing, robotics, and cybersecurity, essential for bolstering the country’s defence capabilities and readiness, said defence firm Maritronics India director Venkatesan N. "We trust that the initiative will offer sufficient funding, incentives, and assistance to the defence sector, particularly to start-ups and MSMEs engaged in these fields", he added.
According to the revised estimates in the budget documents, the armed forces had an unspent amount of Rs 5,372 crore from the previous year's capital outlay of Rs 1.62 lakh crore. In the fiscal year 2022-23, the armed forces exceeded the budget allocation from the preceding year by approximately Rs 21,000 crore due to heightened border tensions with China, leading to emergency purchases and increased focus on infrastructure development in forward areas. For the fiscal year 2023-24, the revised estimates indicate that the revenue expenditure surpassed the allocation by Rs 28,548 crore, primarily attributed to expenses related to pay and allowances, transportation, the ex-servicemen contributory health scheme, and Rashtriya Rifles.
“A large portion of this year’s allocation will be utilised for procurement through domestic sources to provide locally manufactured next-generation weapon systems to the country which will have a multiplier effect on GDP, create employment, ensure capital formation and provide a stimulus to the domestic economy,” the statement said. The Border Roads Organisation, pivotal to India's border infrastructure development, has been granted a capital outlay of Rs 6,500 crore. This allocation marks a 30 percent increase compared to the fiscal year 2023-24 and a substantial 160 percent rise from the allocation in the fiscal year 2021-22. The decision is attributed to the ongoing threat perception at the India-China border, as mentioned in the statement.
