Govt allocates Rs 6.21 lakh cr to Defence; earmarks Rs 6,500 cr for border infra

New Delhi, Feb 1 (UNI): The Ministry of Defence has been allocated Rs 6.21 lakh crore in the interim Union Budget, which is 4.72% more than FY 2023-24.

Of this, a major share of 27.67% goes to capital, 14.82% to revenue expenditure on sustenance and operational preparedness, 30.68% to pay and allowances, 22.72% to defence pensions and 4.11% to civil organisations under Ministry of Defence.


In the light of the continued threat perception faced at the Indo-China border, there continues a jump in the Capital Budget allocation to the Border Roads Organisation (BRO).

The allocation for BE 2024-25 is Rs 6,500 crore, which is 30% higher than the allocation for FY 23-24 and 160% higher over the allocation of FY 2021-22.

The financial provision made during the budget this year, will, apart from promoting strategic infrastructural development in the border areas, also boost socio-economic development in that region along with promoting tourism.

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

Allocation to the Indian Coast Guard (ICG) for this FY 2024-25 is Rs 7.651.80 crore which is 6.31% higher over the allocation of FY 2023-24. Of this, Rs 3,500 crore is to be incurred only on capital expenditure, adding teeth to the arsenal of the ICG to address the emerging challenges posed in water and provide humanitarian assistance to other nations. The allocation will facilitate the acquisition of fast moving patrolling vehicles/interceptors, advanced electronic surveillance systems and weapons.

The budgetary allocation to Defence Research and Development Organisation (DRDO) has been increased to Rs 23,855 crore in FY 2024-25 from Rs 23,263.89 crore in FY 2023-24.

Of this allocation, a major share of Rs 13,208 crore is allocated for capital expenditure. This will financially strengthen the DRDO in developing new technology with special focus on fundamental research and hand-holding the private parties through Development-cum-production partner.

Allocation to Technology Development Fund (TDF) scheme stands out to be Rs 60 crore which is especially designed for new start-ups, MSMEs and academia attracting the young bright minds interested in innovation and developing niche technology in the field of defence in collaboration with the DRDO.

The announcement regarding a Rs one lakh crore corpus for Deep Tech for long term loan to tech-savvy youth/companies and the tax advantage to the start-ups will give further impetus to innovation in the defence sector.

The Budgetary allocation for capital expenditure in Defence for FY 24-25 is Rs 1.72 lakh crore which is 20.33% higher than the actual expenditure of FY 22-23 and 9.40 % more than the Revised Allocation of FY 23-24.

The allocation is in line with the Long Term Integrated Perspective Plan (LTIPP) of the three Services aimed to fill the critical capability gaps through modernisation of the Armed Forces by materialising some big ticket acquisitions in FY 2024-25. The enhanced budgetary allocation will facilitate in equipping the Armed Forces with state-of-the-art, niche technology lethal weapons, fighter aircraft, ships, platforms, unmanned aerial vehicles, drones, specialist vehicles etc.

Meanwhile, planned modernisation of existing Su-30 fleet along with additional procurement of aircraft, acquisition of advanced engines for existing MiG-29, acquisition of transport aircraft C-295 and missile systems will be funded out of the budget being allocated.

Apart from this, to take the initiative of ‘Make in India’ further the LCA MK–I IOC/FOC configuration will be additionally funded to ensure state-of-the-art technology in domestic production.

The Indian Navy projects such as acquisition of deck-based fighter aircraft, submarines, next generation survey vessels etc. will all materialise through this allocation. The sizeable allocation under capital is centered around promoting ‘Aatmanirbharta’ in Defence.

Large portion of the allocation will be utilised for procurement through domestic sources to provide domestically manufactured next generation weapon system to the country which will have a multiplier effect on the GDP, create employment, ensure capital formation and provide a stimulus to the domestic economy.

This year onwards, the Government has taken a conscious call to foster jointness among the services by consolidating the demand of the three services into similar items of expenditure such as land, aircraft and aeroengines, heavy and medium vehicles. 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.

Allocation to the Armed Forces for revenue expenditure (Other than Salary) meant for sustenance and operational commitment for FY 24-25 continues to be high at Rs 92,088 crore, which is 48% higher than the budgetary allocation of FY 2022-23.

Total Budgetary allocation on account of Defence pensions is Rs 1,41,205 crore which is 2.17% higher than the allocation made during 2023-24. It will be incurred on monthly pension to approx. 32 lakh pensioners through SPARSH and through other pension disbursing authorities.

The total allocation to Ex-Servicemen Welfare Scheme for FY 2024-25 is 28% higher than the allocation for FY 23-24 (From Rs 5,431.56 crore to Rs 6,968 crore).

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