Defence gets highest budgetary allocation of over ₹6 lakh crore among ministries

At a time when global uncertainty continues to threaten regional peace and security, the government allocated an outlay of ₹6,21,940.85 crore for defence for FY25, which is the highest among all the Union ministries.

Of the total outlay, Ministry of Defence (Civil) got ₹25,963.18 crore, the figure for defence services (revenue) was ₹2,82,772.67 while ₹1,41,205.00 crore has been earmarked to meet defence pension expenses.

The allocation to MoD for FY25 is higher by approximately Rs 1 lakh crore (18.43 per cent) over the allocation for FY23 and 4.79 per cent more than allocation of FY24, the MoD stated. Out of this, a share of 27.66 per cent goes to capital; 14.82 per cent for revenue expenditure on sustenance and operational preparedness; 30.66 per cent for pay and allowances; 22.70 per cent for defence pensions, and 4.17 per cent for civil organisations under MoD.

The total allocation comes out as approximately 12.90 per cent of the total budget of Union of India.

In absolute terms, budgetary allocation under capital head to the defence forces for FY25 is ₹1.72 lakh crore, which is 20.33 per cent higher than the actual expenditure of FY23 and 9.40 per cent more than the Revised Allocation of FY24.

“The allocation is aimed to fill the critical capability gaps through big ticket acquisitions in current and subsequent FYs. The enhanced budgetary allocation will fulfil the requirement of annual cash outgo on planned Capital acquisitions aimed at equipping the Armed forces with state-of-the-art niche technology, lethal weapons, fighter aircraft, ships, submarines, platforms, unmanned aerial vehicles, drones, specialist vehicles etc,” the Ministry informed.

While maintaining the allocation made to the Ministry of Defence (MoD) during interim budget presented on February 1, the Government has made an additional allocation to the tune of ₹400 crore on innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, the Ministry said in a statement after Finance Minister Nirmala Sitharaman presented general budget in Lok Sabha on Tuesday.

In the interim budget, the outlay was pegged at ₹6,21,540.85 crore.

The individual budgetary allocation for three services has come down in this FY25 if compared with the RE of FY24, the Ministry of Defence (revenue) figures showed. However, it has gone up if BE of FY25 is compared with BE of FY24.

The maximum hike in allocation has gone to Indian Army from BE of ₹1,97,236.85 crore in FY25 which is 5.4 per cent jump from the FY24 BE of ₹1,87,206.44 crores. However, the BE figure for FY25 was down by ( -1.7 per cent ) if compared with the RE of Rs 200633.20 crore for FY24.

Indian Air Force (IAF) followed with a 4.1 per cent hike in its outlay which was BE of ₹47,523.49 crore for FY25 in comparison to ₹45,645.58 crore. The RE for the FY24 was ₹57,972.10 crore which meant that the budget outlay was slashed by -18 per cent in the current financial year for the IAF.

The BE for Indian Navy is ₹33,528.73 crore for FY25, which is 1.5 per cent up from BE of ₹33,034.20 crores for FY24 but -6.6 per cent less than the RE of ₹35,900.53 for FY24.

Reacting to the general budget, Prime Minister Narendra Modi that it has many provisions for making India’s defence sector ‘aatmanirbhar’.

Adding to PM Modi’ insight into the budget, Defence Minister Rajnath Singh gave granular figures to state that the allocation of Rs 1,05,518 crore for domestic capital procurement will provide further impetus to atmanirbharta in the military sector.

Singh thanked Finance Minister Nirmala Sitharaman for presenting an “excellent and outstanding” budget which had the highest allocation to the MoD. “The capital outlay of ₹1,72,000 crore will further strengthen the capabilities of Armed Forces. Earmarking of ₹1,05,518.43 crore for domestic capital procurement will provide further impetus to Atmanibharta,” he said.

“I am pleased that Border Roads have been given 30 per cent increase in allocation over the last budget under the capital head. This allocation of ₹6,500 crore to BRO will further accelerate our border infrastructure,” the senior Union Minister said.

To boost the startup ecosystem in defence industries, ₹518 crore has been allocated to the iDEX scheme to fund technological solutions given by startups, MSMEs and innovators, Singh said.

The MoD also stated that continued higher allocation for operational readiness boosts the morale of the armed forces with the sole motive of keeping them battle ready at all times. The Government has allocated Rs 92,088 crores during the current FY under this head, which is 48 per cent higher than the budgetary allocation of FY23.

“This is aimed to provide best maintenance facilities and support system to all platforms including aircraft and ships. It will facilitate procurement of ammunition; mobility of resources & personnel as demanded by the security situation, and strengthen the deployment in forward areas for any unforeseen situation,” the Ministry pointed out.