In a decisive move to bolster India’s defence capabilities and self-reliance, the Regular Union Budget for FY 2024-25 has allocated an unprecedented Rs 6.22 lakh crore (approximately US $75 billion) to the Ministry of Defence (MoD). This allocation marks a 4.79 percent increase from the previous fiscal year, making it the highest among all ministries.

Significant Capital Acquisition and Operational Readiness Boost

According to the details shared by the MoD on Tuesday (July 22, 2024) a substantial portion of this budget, Rs 1.72 lakh crore, is earmarked for capital acquisition. This allocation is aimed at addressing critical capability gaps through significant acquisitions, including state-of-the-art technology, lethal weapons, fighter aircraft, ships, submarines, unmanned aerial vehicles, and specialist vehicles. The enhanced budget represents a 20.33 percent increase over the actual expenditure of FY 2022-23 and a 9.40 percent increase over the revised allocation for FY 2023-24.

To ensure the Indian Armed Forces remain battle-ready, Rs 92,088 crore has been allocated for sustenance and operational readiness. This represents a 48 percent increase from the FY 2022-23 budget, highlighting the government’s commitment to maintaining the highest levels of operational preparedness.

Promoting Self-Reliance and Economic Stimulus

As per the details, in alignment with the ‘Aatmanirbharta’ (self-reliance) initiative, the MoD has earmarked 75 percent of the modernization budget, amounting to Rs 1.05 lakh crore, for procurement through domestic industries. This move is expected to have a multiplier effect on the GDP, generate employment, and stimulate capital formation, providing a significant boost to the economy.

Enhancing Veteran Care and Border Infrastructure

Recognizing the sacrifices of veterans, the budget has increased the allocation for the Ex-Servicemen Contributory Health Scheme (ECHS) to Rs 6,968 crore, a 28 percent increase from the previous year. This follows a 70 percent enhancement at the revised estimate stage during FY 2023-24.

Strategic infrastructure development in border areas is another priority, with Rs 6,500 crore allocated to the Border Roads Organisation (BRO). This represents a 30 percent increase from the previous fiscal year and a staggering 160 percent increase over the allocation of FY 2021-22. Key projects, such as the development of the Nyoma Airfield in Ladakh and the construction of strategic tunnels in Himachal Pradesh and Arunachal Pradesh, will be funded from this allocation.

Strengthening Coastal Security and Research Innovation

The Indian Coast Guard (ICG) has received Rs 7,651.80 crore, a 6.31 percent increase from the FY 2023-24 allocation. This funding will enhance the ICG’s capability to address emerging maritime challenges and provide humanitarian assistance, with Rs 3,500 crore dedicated to capital expenditure for acquiring fast-moving patrol vehicles, advanced electronic surveillance systems, and weapons.

The Defence Research and Development Organisation (DRDO) has seen its budget increased to Rs 23,855 crore, with a major share of Rs 13,208 crore allocated for capital expenditure. This financial boost will enable the DRDO to focus on fundamental research and collaboration with private entities to develop new technologies.

Fostering Innovation through iDEX

In a significant push for innovation, the budget for the Innovation for Defence Excellence (iDEX) scheme has been enhanced to Rs 518 crore from Rs 115 crore in the previous fiscal year. This initiative aims to engage startups, MSMEs, and innovators to develop indigenous technological solutions for the Indian military. The iDEX scheme offers grants of up to 50 percent of the product development budget, with a maximum of Rs 25 crore per applicant.

Increased Defence Pension Allocation

The budget for defence pensions has been increased to Rs 1.41 lakh crore, a 2.17 percent increase from the previous year. This allocation will support approximately 32 lakh pensioners through the System for Pension Administration (Raksha) or SPARSH and other pension-disbursing authorities.

Commitment to a Prosperous and Self-Reliant India

Defence Minister Rajnath Singh has lauded the budget as a step towards a prosperous and self-reliant India, aligning with Prime Minister Narendra Modi’s vision of inclusive and fast-paced development. The budget is expected to accelerate India’s economic transformation, contributing to the goal of becoming a US$5 trillion economy by 2027.

The increased defence budget underscores the government’s commitment to strengthening the Armed Forces, promoting self-reliance in defence technology, and ensuring the security and prosperity of the nation.