The Regular Union budget of Financial Year (FY) 2024-25 noted that the Ministry of Defence (MoD) has been allocated Rs 6,21,940.85 crore (approx. US $75 Billion) which is the highest among the Ministries, stated the Ministry of Defence, PIB.

MoD also received an addition of Rs. 400 crore for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, stated the Ministry. MoD is said to be engaging with start-ups/MSMEs and innovators to develop Def-Tech solutions and supply the Indian military with innovative and indigenous technological solutions. A grant of upto 50% of Product Development Budget with enhanced limit (Max) of Rs 25 crore per applicant will be awarded as per extant iDEX guidelines, the Ministry added.

The allocation to MoD for FY 2024-25 is higher by approx. Rs one lakh crore (18.43%) over the allocation for FY 2022-23 and 4.79% more than allocation of FY 2023-24. Out of this, a share of 27.66% goes to capital; 14.82% for revenue expenditure on sustenance and operational preparedness; 30.66% for Pay and Allowances; 22.70% for Defence Pensions, and 4.17% for civil organisations under MoD. The total allocation comes out as approx. 12.90% of Budgetary Estimate of Union of India.

“The allocation is aimed to promote ‘Aatmanirbharta’ in defence technology & manufacturing and equipping the Armed Forces with modern weapons/platforms along with creation of job opportunities for the youth,” stated the Ministry.

Modernisation of the forces at the centre

In absolute terms, budgetary allocation under capital head to the Defence Forces for FY 2024-25 is Rs 1.72 lakh crore, which is 20.33% higher than the actual expenditure of FY 2022-23 and 9.40% more than the Revised Allocation of FY 2023-24.

The Ministry stated the increase in allocation is intended to address the “critical capability gaps through  big ticket acquisitions in current and subsequent FYs.” The allocation is aimed to “fulfil the requirement of annual cash outgo on planned Capital acquisitions aimed at equipping the Armed forces with state-of-the-art niche technology, lethal weapons, fighter aircraft, ships, submarines, platforms, unmanned aerial vehicles, drones, specialist vehicles etc,” stated the Ministry.

Strengthening domestic capacity

MoD has earmarked 75% of modernisation budget amounting to Rs 1,05,518.43 crore for procurement through domestic industries during this FY. This will have a multiplier effect on GDP, employment generation and capital formation, thus providing a stimulus to the economy.

Enhanced allocation for sustenance & operational readiness

The Government has allocated Rs 92,088 crore during the current FY under this head, which is 48% higher than the budgetary allocation of FY 2022-23. The Ministry has stated that the allocation is focused on procuring the “best maintenance facilities and support system to all platforms including aircraft and ships. It will facilitate procurement of ammunition; mobility of resources & personnel as demanded by the security situation, and strengthen the deployment in forward areas for any unforeseen situation.”

Ensuring better healthcare facilities to veterans

The MoD stated that through the scheme, Ex-Servicemen Contributory Health Scheme (ECHS), the government is set on availing the “best healthcare facilities to  the veterans and their dependents through enhanced allocation.” Further, in the  regular budget for FY 2024-25, Rs 6,968 crore has been allotted to ECHS which is 28% higher than the previous year allocation. “This follows the significantly higher allocation at revised estimate stage during the FY 2023-24 when the allocation to ECHS was enhanced by 70 % over BE, stated MoD.

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Bolstering Border Infrastructure for strategic requirements

MoD also added that the Government is set to enhance the infrastructure of borders through higher allotments and executing strategically-significant projects along with providing last-mile connectivity in the border areas. With such plans ahead, the allocation given to Border Roads Organisations (BRO) under capital for Budget Estimates (BE) 2024-25 has been made as “Rs 6,500 crore, which is 30% higher than the allocation for FY 2023-24, and 160% higher over the allocation of FY 21-22.”

The allocations for 2024-25 is believed to promote the the border areas and boost the socio-economic of the said areas. “Projects such as development of Nyoma Airfield in Ladakh at an altitude of 13,700 feet, permanent bridge connectivity to southernmost Panchayat of India in Andaman and Nicobar Islands, 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,” added the Ministry.

Enhancing the capability of Indian Coast Guard

The Indian Coast Guard (ICG) has received a budget allocation of Rs 7,651.80 crore for the 2024-25 financial year, a 6.31% increase from the previous year. Rs 3,500 crore, is earmarked for capital expenditure to enhance the ICG’s capabilities in addressing maritime challenges and providing humanitarian aid to other countries. The allocation is said to facilitate the acquisition of fast-moving patrolling vehicles/interceptors, advance electronic surveillance system and weapons.

Self-reliance through research & innovation

The Defence Research and Development Organisation (DRDO) has received a budget boost for the 2024-25 financial year, with an allocation of Rs 23,855 crore, up from Rs 23,263.89 crore in the previous year. Rs 13,208 crore, is dedicated to capital expenditure, enabling DRDO to develop cutting-edge technologies, fundamental research, and collaboration with private sector partners. Additionally, Rs 60 crore has been allocated to the Technology Development Fund (TDF) scheme, which aims to support startups, MSMEs, and academia in innovating and developing niche technologies in partnership with DRDO. The Government has also increased the allocation on innovation in defence through iDEX from Rs 115 crore during FY 2023-24 to Rs 518 crore in the current fiscal year.

Defence Pension Budget increased to Rs 1.41 lakh crore

“Total budgetary allocation on account of defence pensions is Rs 1,41,205 crore which is 2.17% higher than the allocation made during 2023-24. It will be incurred on monthly pension to approx. 32 lakh pensioners through System for Pension Administration (Raksha) or SPARSH and through other pension disbursing authorities,” stated the Ministry.

In a post on X, Rajnath Singh, Raksha Mantri stated that inspired by Narendra Modi, PM, the vision of inclusive and fast-paced development, the budget will accelerate the country’s economic transformation. It will go a long way in making India a $five trillion economy by 2027, he added.

“On the MoD allocation, Rajnath Singh exuded confidence that the capital outlay of Rs 1,72,000 crore will further strengthen the capabilities of the Armed Forces. He also hoped that the earmarking of Rs 1,05,518.43 crore for domestic capital procurement will provide further impetus to the ‘Aatmanibharta’ in defence,” stated MoD.