The Ministry of Defence (MoD) has been allocated a record amount of over ₹6.21 lakh crore in the Union Budget for the Financial Year (FY) 2024-25. This allocation represents the highest budgetary amount among all ministries.
According to a Ministry of Defence press release, “In the Regular Union Budget for FY 2024-25, the Ministry of Defence has been allocated ₹6,21,940.85 crore (approximately USD 75 billion), the highest among the ministries.”
The budget maintains the allocation made during the interim budget and includes an additional ₹400 crore for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme. This scheme is designed to engage with start-ups, MSMEs, and innovators to develop cutting-edge defence technologies and provide the Indian military with indigenous solutions. The scheme offers a grant of up to 50 percent of the product development budget, with an enhanced limit of ₹25 crore per applicant.
The defence budget for FY 2023-24 stands at ₹5,93,537.64 crore, marking an increase of approximately ₹68,834 crore from the previous year’s allocation of ₹5,25,166 crore for FY 2022-23.
This year’s budget allocation is distributed as follows: 27.67 percent is designated for capital expenditure, 14.82 percent for revenue expenditure related to sustenance and operational readiness, 30.68 percent for pay and allowances, 22.72 percent for defence pensions, and 4.11 percent for civil organizations under the Ministry of Defence. The capital expenditure is primarily used for acquiring new weapons, systems, and equipment.
“The allocation to MoD for FY 2024-25 is higher by approximately ₹1 lakh crore (18.43 percent) over the allocation for FY 2022-23 and 4.79 percent more than the allocation for FY 2023-24. Out of this, 27.66 percent is allocated to capital expenditure; 14.82 percent for revenue expenditure on sustenance and operational preparedness; 30.66 percent for pay and allowances; 22.70 percent for defence pensions; and 4.17 percent for civil organisations under MoD. The total allocation represents approximately 12.90 percent of the Union Budget of India,” the release stated.
The allocation is intended to promote ‘Aatmanirbharta’ (self-reliance) in defence technology and manufacturing and to equip the Armed Forces with modern weapons and platforms. It also aims to create job opportunities for the youth.
In a statement on X (formerly Twitter), Defence Minister Rajnath Singh expressed his gratitude to Nirmala Sitharaman for the “highest allocation” of 12.9 percent of the total budget for FY 2024-25.
Congratulations to Finance Minister Smt. @nsitharaman for presenting an excellent and outstanding full year Budget for FY 2024-25 which will help in moving towards making a prosperous and self-reliant ‘Viksit Bharat’. Inspired by PM Shri @narendramodi vision of Inclusive and…
— Rajnath Singh (@rajnathsingh) July 23, 2024
He remarked, “The capital outlay of ₹1,72,000 crore will significantly enhance the capabilities of our Armed Forces. The allocation of ₹1,05,518.43 crore for domestic capital procurement will boost Atmanirbhar Bharat. I am also pleased to note that Border Roads have received a 30% increase in allocation compared to the previous budget. This ₹6,500 crore allocation to the BRO will accelerate the development of our border infrastructure.”
He added, “To support the startup ecosystem in Defence Industries, ₹518 crore has been allocated to the iDEX scheme to fund technological solutions provided by startups, MSMEs, and innovators.”
“In absolute terms, the budgetary allocation under the capital head for the Defence Forces for FY 2024-25 is ₹1.72 lakh crore, which is 20.33 percent higher than the actual expenditure of FY 2022-23 and 9.40 percent more than the revised allocation of FY 2023-24. This allocation is aimed at filling critical capability gaps through significant acquisitions in the current and subsequent financial years. The enhanced budget will meet the requirements for annual cash outflows on planned capital acquisitions to equip the Armed Forces with state-of-the-art technology, lethal weapons, fighter aircraft, ships, submarines, unmanned aerial vehicles, drones, and specialist vehicles,” the Ministry added.
Additionally, the MoD has earmarked 75 percent of the modernization budget, amounting to ₹1,05,518.43 crore, for procurement through domestic industries. This move is expected to stimulate the economy by boosting GDP, generating employment, and promoting capital formation.
“The continued higher allocation for operational readiness boosts the morale of the Armed Forces, ensuring they remain battle-ready at all times. The Government has allocated ₹92,088 crore for this purpose, which is 48 percent higher than the budgetary allocation for FY 2022-23. This funding will support maintenance facilities, procurement of ammunition, mobility of resources and personnel, and strengthening deployments in forward areas,” the Defence Ministry said.
The government is also committed to enhancing healthcare facilities for veterans through an increased allocation to the Ex-Servicemen Contributory Health Scheme (ECHS). For FY 2024-25, ₹6,968 crore has been allocated to ECHS, representing a 28 percent increase from the previous year.
The budget also provides for strategic infrastructure development in border areas and socio-economic development projects. Notable projects include the Nyoma Airfield development in Ladakh, permanent bridge connectivity in the Andaman and Nicobar Islands, and key tunnels in Himachal Pradesh and Arunachal Pradesh.
The Indian Coast Guard has been allocated ₹7,651.80 crore for FY 2024-25, which is 6.31 percent higher than the previous year’s allocation. This budget will support capital expenditure and enhance the Coast Guard’s capabilities to address maritime challenges.
The Defence Research and Development Organisation (DRDO) will receive ₹23,855 crore, up from ₹23,263.89 crore in FY 2023-24. This includes ₹13,208 crore for capital expenditure, aimed at strengthening DRDO’s capacity to develop new technologies. Additionally, the Technology Development Fund (TDF) scheme has been allocated ₹60 crore to support start-ups, MSMEs, and academia in technological innovation.
Finally, the allocation for innovation through the iDEX scheme has increased from ₹115 crore in FY 2023-24 to ₹518 crore, encouraging start-ups and innovators to develop defence technologies.
The total budgetary allocation for defence pensions stands at ₹1,41,205 crore, a 2.17 percent increase from the previous year, ensuring timely pension disbursement to approximately 32 lakh pensioners through the System for Pension Administration (Raksha) or SPARSH and other disbursing authorities.
Also Read: Union Budget 2024: Government Unveils Major Infrastructure Boost In Union Budget 2024-25
