Union Budget 2024-25 Allocates Record Rs 6.22 Lakh Crore to Defence, Boosts Innovation and Modernization

The MoD’s allocation for FY 2024-25 represents an approximate increase of Rs 1 lakh crore (18.43%) over FY 2022-23 and a 4.79% rise from FY 2023-24.

In the Union Budget for the Financial Year (FY) 2024-25, the Ministry of Defence (MoD) has been allocated a record Rs 6,21,940.85 crore (approximately USD 75 billion), marking the highest allocation among all ministries. This budget includes a notable increase in funding for innovation in defence, through an additional Rs 400 crore allocated to the Acing Development of Innovative Technologies with iDEX (ADITI) scheme. This initiative engages with start-ups, MSMEs, and innovators to develop advanced defence technologies, offering grants up to 50% of the product development budget, with a maximum of Rs 25 crore per applicant.

The MoD’s allocation for FY 2024-25 represents an approximate increase of Rs 1 lakh crore (18.43%) over FY 2022-23 and a 4.79% rise from FY 2023-24. The budget is divided into several key areas: 27.66% for capital expenditure, 14.82% for revenue expenditure, 30.66% for pay and allowances, 22.70% for defence pensions, and 4.17% for civil organisations under the MoD. Overall, this allocation constitutes about 12.90% of the Union Budget of India.

Modernisation of Forces

The capital budget for the Defence Forces is set at Rs 1.72 lakh crore, a 20.33% increase from FY 2022-23 and 9.40% more than the revised allocation for FY 2023-24. This funding aims to address critical capability gaps through major acquisitions, including advanced technology, weapons, aircraft, ships, submarines, drones, and more.

Strengthening Domestic Capacity

The MoD has allocated 75% of its modernisation budget, amounting to Rs 1,05,518.43 crore, for procurement through domestic industries. This move is expected to stimulate the economy by boosting GDP, generating employment, and enhancing capital formation.

Enhanced Operational Readiness

An allocation of Rs 92,088 crore has been made for operational readiness, 48% higher than the allocation for FY 2022-23. This funding will support the maintenance and operational needs of platforms, procurement of ammunition, and resource mobility.

Improved Healthcare for Veterans

The Ex-Servicemen Contributory Health Scheme (ECHS) has been allocated Rs 6,968 crore, a 28% increase from the previous year. This follows a 70% increase in FY 2023-24’s revised estimates, aiming to provide enhanced healthcare facilities for veterans and their dependents.

Border Infrastructure Development

The Border Roads Organisation (BRO) has received Rs 6,500 crore, a 30% increase from FY 2023-24 and 160% higher than FY 2021-22. This funding supports strategic infrastructure projects along the borders, including airfields, bridges, and tunnels.

Enhancing Indian Coast Guard Capabilities

The Indian Coast Guard (ICG) is allocated Rs 7,651.80 crore for FY 2024-25, with Rs 3,500 crore earmarked for capital expenditure. This allocation will enhance the ICG’s capabilities to address maritime challenges and provide humanitarian assistance.

Fostering Self-Reliance and Innovation

The Defence Research and Development Organisation (DRDO) has been allocated Rs 23,855 crore, up from Rs 23,263.89 crore in FY 2023-24, with a significant portion allocated for capital expenditure. The Technology Development Fund (TDF) has been increased to Rs 60 crore, focusing on supporting start-ups, MSMEs, and academia.

Defence Pension Budget

The budget for defence pensions is Rs 1,41,205 crore, a 2.17% increase from FY 2023-24, covering pensions for approximately 32 lakh pensioners.

Union Defence Minister Shri Rajnath Singh praised the budget as "excellent and outstanding," aligning with Prime Minister Shri Narendra Modi’s vision for rapid and inclusive development. He expressed confidence that the significant capital outlay will further enhance the Armed Forces' capabilities and bolster the ‘Aatmanirbharta’ (self-reliance) in defence.