New Delhi, Feb 1: The Interim Union Budget for the financial year 2024-25 has allocated a record-breaking Rs 6.21 lakh crore to the Ministry of Defence (MoD).
This increase of 4.72 percent compared to the previous fiscal year (FY 2023-24) underscores the nation’s determination to fortify its defence infrastructure, emphasising self-reliance and the promotion of defence exports.
CAPITAL ACQUISITION AND MODERNISATION
A noteworthy aspect of the budget is the allocation of Rs 1.72 lakh crore, constituting 27.67 percent of the total defence budget, dedicated to capital acquisition.
This significant fund aims to equip the armed forces with cutting-edge technology, including fighter aircraft, ships, Unmanned Aerial Vehicles (UAVs), and drones.
The emphasis on modernisation aligns with the Long Term Integrated Perspective Plan (LTIPP), strategically addressing critical capability gaps and enhancing the overall combat readiness of the armed forces.
The budget further outlines specific plans, such as the modernisation of the Su-30 fleet, procurement of advanced engines for MiG-29, and the acquisition of transport aircraft C-295.
Additionally, a distinct focus on the ‘Make in India’ initiative is evident, with funding allocated to the LCA MK–I IOC and FOC configuration and various Indian Navy projects.
This signals not only a commitment to security but also a significant boost to the domestic defence industry, fostering economic growth.
JOINTNESS AMONG SERVICES
To foster jointness and flexibility in financial management, the government has taken a strategic step by consolidating the demands of the three services into similar items of expenditure.
This organisational shift enables the Ministry of Defence to reallocate funds among the services based on inter-service priorities, expediting decision-making processes, and optimising capital budget utilisation.
The move signifies a concerted effort to enhance coordination and efficiency among the armed forces.
REVENUE EXPENDITURE AND PENSIONS
The budget with a substantial allocation of Rs 92,088 crore for revenue expenditure (other than salary). This allocation, 48 percent higher than the budgetary allocation of FY 2022-23, addresses the maintenance, support, and day-to-day operational needs of the armed forces.
The continued emphasis on revenue expenditure highlights the government’s dedication to ensuring the armed forces are well-equipped and prepared for any exigency.
In line with the increased budgetary focus on the welfare of defence personnel, the Defence Pension Budget has been raised to Rs 1.41 lakh crore.
This would continue financial support for approximately 32 lakh pensioners, reflecting the government’s commitment to the well-being of its veterans.
Border Infrastructure and Coast Guard
The budget allocates Rs 6,500 crore to strengthen border infrastructure, reflecting a 30 percent increase over FY 2023-24.
This allocation is pivotal in enhancing strategic infrastructure along the Indo-China border, promoting socio-economic development, and boosting tourism.
The focus on border infrastructure is a strategic move to fortify India’s defences in key areas, responding to the evolving security landscape.
The Indian Coast Guard receives a significant boost, with an allocation of Rs 7,651.80 crore, a 6.31% increase over the previous fiscal year.
This includes Rs 3500 crore for capital expenditure, reinforcing the Coast Guard’s capabilities in addressing emerging challenges in maritime security.
The enhanced allocation emphasizes the importance of safeguarding India’s maritime interests and securing its vast coastline.
DRDO AND INNOVATION
The Defence Research and Development Organisation (DRDO) sees an enhanced budget of Rs 23,855 crore, with a major focus on capital expenditure.
This allocation is geared towards developing new technologies, emphasizing fundamental research, and supporting private entities through the Development-cum-Production Partner model.
The increased budget reflects a commitment to fostering indigenous innovation and technological advancements in defence.
Additionally, the budget allocates Rs 60 crore to the Technology Development Fund (TDF) scheme, encouraging innovation in the defence sector through collaboration with startups, MSMEs, and academia. This move not only stimulates innovation but also aligns with the broader national agenda of promoting a robust startup ecosystem and technological prowess.
DEFENCE MINISTER’S RESPONSE
Defence Minister Rajnath Singh commended Finance Minister Nirmala Sitharaman for presenting a positive and encouraging ‘Interim Budget.’ Singh highlighted the alignment of the budget with Prime Minister Narendra Modi’s vision of a confident, strong, and self-reliant India.
He particularly emphasised the substantial push for infrastructure, construction, manufacturing, housing, and technology development, considering it a catalyst for India’s unprecedented growth in the next five years.