Image Source : MOD WEBSITE Indian Military
India’s defence budget has been on an upsurge in the last few years, with the FY 2024-25 defence budget going up to Rs 6.22 lakh crore. In 2014, India’s defence budget was Rs 2.53 lakh crore. A simple comparison between these two budgets hints at an approximate 2.5 times increase in defence expenditure in these 10 years. The budgetary allocation, excluding pensions, saw an increase of 8.6% over the last year. If pensions are included, the growth stands at 7.1%.
As India faces adversaries in its northern borders, given Pakistan’s hostility and Chinese expansionist designs with geopolitical conflicts persisting in the Middle East and between Russia and Ukraine, India is required to keep the pace that it has maintained in the last ten years.
India needs to increase capital expenditure
Notably, the growth in the capital budget, which was approximately 15 percent, was a good sign in FY 2024-25. The defence budgets in the last 10 years, particularly last year’s budget, focussed on the modernisation of the Armed Forces and the acquisition of new technologies.
Notably, the capital expenditure in the 2024-25 budget was 34 per cent of the total defence budget, which the government needs to increase to cater for the change in global geopolitical dynamics and to keep adversaries at bay. Last year, the budgetary allocation under capital head to the Defence Forces for FY 2024-25 was Rs 1.72 lakh crore.
India’s defence budget on continuous rise
According to a report by PwC, last year’s budget was INR 4,80,736 crore excluding pensions, which hints at an increase of 8.6% compared to 2023-24’s budget estimates. The total defence budget was Rs 6,21,941 crore, which also marks an increase of 7.1% over last year’s budget estimate.
Since India faces the absence of critical technology, the research and development (R&D) budget is likely to get a hike, which currently stands at approximately Rs 13,200 crore.
Another significant development in these last 10 years is the government’s focus on Aatmanirbharta in defence technology & manufacturing. The Ministry of Defence (MoD) had earmarked 75% of the modernisation budget amounting to Rs 1,05,518.43 crore for procurement through domestic industries during the last financial year.
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