In an effort to sustain the ongoing modernisation drive and ensure operational readiness, the Interim Budget for Defence for 2024-25 is pegged at `6.21 lakh crore. The allocations for 2023-24 were `5.94 lakh crore. The modest hike is 4.72 per cent. Moreover, the defence allocation is 13.04 per cent of the total Union Budget presented by Finance Minister Nirmala Sitharaman.
She announced in her Budget speech an ambitious scheme worth `1 lakh crore corpus for “deep-tech” technologies in the military domain.
Sitharaman said that `1.72 lakh crore were allocated as capital expenditure for procuring aircraft and warships, a jump of nearly `10,000 crore from the capital outlay for defence in 2023-24.
The increased capital outlay for the next fiscal year comes in the backdrop of the Navy proposing to procure fighter jets for its aircraft carriers and six submarines, while the Indian Air Force seeks to bolster its fighter aircraft squadron strength.
Given the tense situation at the border facing China and the dynamic geopolitical landscape, the government has assured that additional funds will be made available as and when required to maintain the operational readiness of the armed forces, as per recent information.
Finance Minister Sitharaman also announced a new scheme aimed at strengthening deep-tech technologies for defense purposes and expediting ‘atmanirbharta’ or self-reliance in this domain.
The total revenue expenditure has been pegged at Rs 4,39,300 crore, which includes Rs 1,41,205 crore for defence pensions, Rs 2,82,772 crore for defence services, and Rs 15,322 crore for the Ministry of Defence (Civil).
In the capital outlay for defence services, Rs 40,777 crore has been allocated for aircraft and aero engines, while an amount of Rs 62,343 crore has been earmarked for “other equipment.” An outlay of Rs 23,800 crore has been designated for the naval fleet, and Rs 6,830 crore has been allocated for naval dockyard projects.
In the Budget, the capital outlay for the Indian Air Force was the highest at Rs 57,137.09 crore, including Rs 15,721 crore for the procurement of aircraft and aero engines and Rs 36,223.13 crore for other equipment.
The revenue expenditure for the Army has been pegged at Rs 1,92,680 crore for 2024-25 while the Navy and the Indian Air Force have been allocated Rs 32,778 crore and Rs 46,223 crore respectively.
Elaborating upon the capital outlay, Defence Ministry officials said planned 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 the budget being allocated.
Apart from this, to take the initiative of ‘Make in India’ further the LCA MK-I IOC/FOC configuration will be additionally funded to ensure state-of-the-art technology in domestic production.
The Indian Navy projects such as acquisition of deck-based fighter aircraft, submarines, next generation survey vessels will all materialise through this allocation.
The sizeable allocation under capital is centered around promoting ‘Aatmanirbharta’ in defence. Large portion of the allocation will be utilised for procurement through domestic sources to provide domestically manufacutured next generation weapon system to the country which will have a multiplier effect on the GDP, create employment, ensure capital formation and provide a stimulus to the domestic economy.
In the light of the continued threat perception faced at the Indo-China border, there continues a jump in the Capital Budget allocation to the Border Roads Organisation. The allocation for BE 2024-25 is Rs 6,500 crore, which is 30 per cent higher than the allocation for FY 23-24 and 160 per cent higher over the allocation of FY 2021-22.
Projects such as 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, Nechiphu tunnel in Arunachal Pradesh and many other projects will be funded out of this allocation.
Defence Minister Rajnath Singh congratulated Finance Minister Sitharaman for presenting a positive and encouraging ‘Interim Budget’, which outlines the vision for a confident, strong and self-reliant ‘Viksit Bharat’.
The Budget gives a glimpse of India’s rapid economic transformation, inspired by Prime Minister Shri Narendra Modi’s vision of making India a developed nation by 2047, he said.
On the increase of capital expenditure outlay, Rajnath described it as a massive push, which will provide a big boost to making India a five trillion dollar economy by 2027.