The defence budget is increased to Rs 5.94 lakh crore for 2023-24 from last year’s allocation of Rs 5.25 lakh crore.
Out of the total budget, the government has allocated Rs 1.62 lakh crore for the capital outlay which is meant for the purchase of military equipment. For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore. This constitutes a hike of over 12.5 per cent from last year.
Finance Minister Nirmala Sitharaman in Parliament presented the Union Budget for the financial year 2023-24. This is the fifth Budget presentation by Union Finance Minister Nirmala Sitharaman. This is a crucial Budget, the last full Budget before the Lok Sabha elections of 2024. The Defence budget is presented amidst the wave of high inflation, the shock of the pandemic and the looming recession worldwide.
In 2021-2022, the government allocated Rs 5.25 lakh crore to the Ministry of Defence (MoD). Last year, the budget allocated to the Defence Sector was the highest among all the ministries in the federal government.
The government is driving several key projects for military modernization. In fact, the government has already outlined many capital acquisition programmes like fighter jets, submarines, small arms, and light tanks which are marked for the new financial year. In addition to that, there are multi-mega military projects underway, including fifth-generation Advanced Medium Combat Aircraft (AMCA), Tejas Mk2 and the critical design and development program for the aero engine.
Defence budget 2023: major highlights
The defence budget was increased to Rs 5.94 lakh crore for 2023-24 from last year’s allocation of Rs 5.25 lakh crore.
A total of Rs 1.62 lakh crore has been set aside for capital expenditure.
The capital outlay is for military equipment and hardware, including weapons, aircraft, and warships.
For 2023-24, an allocation of Rs 2,70,120 crore has been made for revenue expenditure which includes the payment of salaries and maintenance.
The allocation to the MoD constitutes 8 percentage of the total budget.
There is a significant increase of about 15 per cent in the pensions budget for the Armed Forces. The pensions budget has also increased from Rs 1.19 lakh crore last year to Rs 1.38 lakh crore this year.
Research and Development in Defence — the allocation to the Defence Research and Development Organisation (DRDO) has been enhanced by 9%, with a total allocation of Rs 23,264 crore in 2023-24.
The defence budget has also focused on the technology development fund. The MoD has specified its funding for the Innovations for Defence Excellence (iDEX) and the Defence Testing Infrastructure Scheme (DTIS) which is Rs 116 crore and Rs 45 crore respectively, representing an enhancement of 93% for iDEX and 95% for DTIS over 2022-23.