Budget 2024: Defence budget pegged at Rs 6.21 lakh crore for 2024-25

New Delhi: India’s defence budget is set to reach a milestone with the Union Finance Minister Nirmala Sitharaman proposing an allocation of Rs 6.21 lakh crore for the military in the interim budget while continuing with the thrust to improve border infrastructure.

This is for the first time the allocation for the military will cross the Rs 6 lakh crore mark, even though more than 50 per cent of the money will be spent on pay and pension. The capital allocation for buying and upgrading the military platform will be 27 per cent of the budget while nearly 15 per cent will be spent on operational preparedness.

The acquisitions on the ministry’s radar include modernisation of the existing Su-30 fleet and additional procurement of the aircraft, buying advanced engines for MiG-29s and procuring of C295 transport aircraft and missile systems.

“Further the LCA MK–I IOC/FOC configuration will be additionally funded to ensure state-of-the-art technology in domestic production,” a Defence Ministry spokesperson said.

With no abatement of hostility between Indian and Chinese troops along the Line of Actual Control, Sitharaman has earmarked Rs 6,500 crore on border roads. The provision is the same as this fiscal’s revised estimate after the Centre jacked up last year’s budgetary allocation.

Apart from promoting strategic infrastructural development in border areas, the provision made in the interim budget will also boost socio-economic development in the region.

Projects such as development of Nyoma air field in Ladakh at an altitude of 13,700 feet; permanent bridge connectivity to India’s southernmost Panchayat in Andaman and Nicobar island; 4.1 km strategically important Shinku La tunnel in Himachal Pradesh and Nechiphu tunnel in Arunachal Pradesh will be funded out of this allocation.

The budgetary allocation for capital expenditure in defence for FY 24-25 is Rs 1.72 lakh crore which is 9.4 per cent more than the revised allocation of FY 23-24. The allocation is in line with the long term integrated perspective plan of the three services with an aim to fill the critical capability gaps by materialising some big ticket acquisitions.

“The announcement of a Rs one lakh crore corpus for deep tech to provide long term loan to tech-savvy youth or companies and the tax advantage to the start-ups will give further impetus to innovation in the defence sector,” the spokesperson said.

This year onwards the government has decided to consolidate the demand of the three services for similar items such as land, aircraft and aero-engines and heavy and medium vehicles in order to foster jointness among the services.

“This will bring flexibility in financial management by enabling the MoD to reappropriate the fund among the three services keeping in view the inter services priority,” he said.