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Defence Budget: Unveiling India’s Rs 6.21 lakh crore Defence budget with a dual focus on self-reliance and export boost

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In a landmark move ahead of the 2024 Lok Sabha elections, Finance Minister Nirmala Sitharaman disclosed the allocation of a staggering Rs 6.21 lakh crore for India’s Ministry of Defence during the Interim Budget presentation in Parliament. This marks a 4.3% increase from the previous year, constituting a substantial portion of the Union Budget at 13.04%.
“In the current geopolitical scenario and with the twin objective of promoting self-reliance and exports, the Defence Budget has touched Rs 6.21 lakh crore in the Financial Year 2024-25. This comes out to be 13.04% of the total Union Budget, which was presented by Finance Minister Nirmala Sitharaman,” the Ministry of Defence said.

Unveiling DeepTech Initiative

A pivotal aspect of this year’s defence budget is the introduction of a groundbreaking scheme by Finance Minister Sitharaman. This initiative aims to fortify DeepTech technologies for defence purposes, aligning with the pursuit of ‘atmanirbharta’ (self-sufficiency) within India’s defence forces.
Breakdown of AllocationsBreaking down the substantial allocation, Rs 1.72 lakh crore is designated for military capital expenditure, Rs 1.4 lakh crore for defence pensions, and Rs 2.8 lakh crore for defence services. Capital expenditure spans salaries, pensions, modernisation, production establishments, maintenance, and research and development.Capital Acquisition and Strategic AllocationsThe Ministry of Defence provided a detailed breakdown, with Rs 1.72 lakh crore, roughly 27% of the total defence budget, allocated for capital acquisition. Additionally, significant funds are allocated to Armed Forces revenue expenditure (excluding salary), Defence pensions, strengthening border infrastructure, Indian Coast Guard, and the Defence Research and Development Organisation (DRDO).

Focus on DeepTech Technologies

DeepTech, encompassing cutting-edge scientific and engineering advancements, has become a focal point. It includes artificial intelligence, machine learning, robotics, nanotechnology, biotechnology, and quantum computing. The initiative aligns with global trends, where AI, ML, and robotics are increasingly integrated into military operations.

Importance of DeepTech in Defence

In an era witnessing unprecedented advancements in the combat landscape, the integration of DeepTech in defence becomes imperative. Countries globally leverage these technologies for military logistics, AI-powered missiles, and robotics in their armed forces. India, keeping pace with technologically advanced nations, is dedicating significant resources to this transformative initiative.

Strategic Emphasis on Digitization and Modernization

Aligning with expectations, the government is steadfast in its commitment to digitization, modernization, and self-sufficiency in defence. The increased budget aligns with contractual commitments, covering salary increments, pension funds, and strategic requirements. Moreover, it fosters collaborations with domestic industries, emphasizing the importance of indigenous defence capabilities.

Detailed Breakup of Defence Budget

The Interim Budget outlines a comprehensive allocation, with Rs 1.72 lakh crore (27.67% of the total defence budget) for capital acquisition, Rs 92,088 crore for Armed Forces revenue expenditure, Rs 1.41 lakh crore for Defence pensions, and substantial funds for border infrastructure, the Indian Coast Guard, and DRDO.

Unprecedented Defence Budget Allocation

With a record allocation of over Rs 6.21 lakh crore for the Financial Year 2024-25, the defence sector receives considerable attention. This amount, constituting 13.04% of the total Union Budget, reflects a forward-looking approach towards national security.

Promoting Aatmanirbharta Through Capital Expenditure

The budgetary allocation for capital expenditure in Defence for FY 24-25 reaches Rs 1.72 lakh crore, emphasizing ‘Aatmanirbharta.’ This allocation aims to bridge critical capability gaps, supporting modernization efforts and big-ticket acquisitions, ensuring state-of-the-art technology for the Armed Forces.

Strengthening Border Infrastructure and Indian Coast Guard

Recognizing the need for fortified border infrastructure, the budget allocates Rs 6,500 crore, a 30% increase over the previous year. The Indian Coast Guard receives Rs 7,651.80 crore, enhancing its capabilities with advanced electronic surveillance systems and weapons.

Focus on Defence Research and Development

The Defence Research and Development Organisation (DRDO) witnesses an increased budget of Rs 23,855 crore, emphasizing fundamental research and technology development. A notable Rs one lakh crore corpus is dedicated to Deep Tech for long-term loans, promoting innovation in the defence sector.

Defence Budget Breakdown (FY 2024-25):

  • Total Allocation: Rs 6.21 lakh crore (13.04% of Union Budget)

    Capital Allocation:

    • Capital Acquisition: Rs 1.72 lakh crore (27.67% of total defence budget)

    Revenue Expenditure:

    • Armed Forces (Excluding Salary): Rs 92,088 crore

    Pension Allocation:

    • Defence Pensions: Rs 1.41 lakh crore

    Strategic Allocations:

    • Strengthening Border Infrastructure: Rs 6,500 crore
    • Indian Coast Guard: Rs 7,651.80 crore
    • DRDO: Rs 23,855 crore

Through a post on X, Defence Minister Rajnath Singh congratulated Finance Minister Nirmala 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 Narendra Modi’s vision of making India a developed nation by 2047, he said.

He also added that there is a big push for infrastructure, construction, manufacturing, housing and technology development in this Budget. “During the COVID-19 when the world was faltering India emerged as the beacon of hope. This Budget is perfectly aligned with PM’s ‘Panchamrit Goals’ and it also paves the way for the next five years of unprecedented growth,” he said.

On the increase of capital expenditure outlay, Singh described it as a massive push, which will provide a big boost to making India a five trillion dollar economy by 2027.

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