Representative image of Indian Armed personnel.
Credit: PTI Photo
Defence or military budget is the funding allocated for the Indian Armed Forces, which finances employee salaries, training costs, maintenance of equipment and facilities, supports new/ongoing operations, and development and procurement of new technologies, weapons, vehicles and equipment.
Finance Minister Nirmala Sitharaman on February 1, 2023, had announced an allocation of Rs 5.94 lakh crore for the Ministry of Defence.
It represented a 13 per cent hike compared to the last years allocations as per media reports.
Here's a look at the Defence Budget allocated in the last 10 years:
India's private sector will benefit significantly from India's defence production plans. The government envisions defence production to cross Rs1.5 lakh crore in FY24, and exports to surpass Rs 20,000 crore. The future focus of the Narendra Modi government is to encourage the development and production of emerging technologies, said Giridhar Aramane, India's Defence Secretary, in an interview to CNBC-TV18.
The Defence Secretary told the television channel that the capital outlay for acquisitions and modernisation could increase by 5 per cent to 7.5 per cent in the upcoming budget. The government had cleared acquisition proposals worth Rs 3.5 lakh crore in 2023.
Aramane also said that there would be no shortfall in government spending on acquisitions or research and development (R&D), and the Finance Ministry is ready to support all the needs of the Defence Ministry, depending on the pace of manufacturing.
In the interview he said, "To strengthen defence with the cheapest possible solutions, we need the private sector and new age companies to work on drones, UAVs, electronic warfare, improve air defence, and ground mobility."
The secretary confirmed that the Indian Air Force is set to receive the first Tejas Mk1A fighter jet by February this year. The government is also actively promoting the jet with friendly countries for exports.
Aramane said both GE and HAL will soon sign a manufacturing agreement, and the deal is very much on track. He also added that the government does not see any hurdles in the delivery of the S400 air defence system from Russia.
Here's a look at the highlights of the Defence Budget (2023-24):
- Hike in pensionary benefits of Rs 1.38 lakh crore (15.5 per cent hike).
- A 3 per cent marginal increase from Rs 1,494 billion to Rs 1,545 billion in Pay and Allowances of armed forces.
- An allocation of Rs 23,264 crore (9 per cent increase) for Defence Research and Development Organisation (DRDO).
- Increased allocation for Innovation for Defence Excellence (iDEX) and Defence Testing Infrastructure Scheme (DRIS) from Rs 1.16 billion to Rs 0.45 billion.
- Allocation of Rs 57,137 crore (6.3 per cent hike) for the Indian Air Force.
- Allocation of Rs 37,241 crore (14.25 per cent hike) for the Indian Army.
- Allocation of Rs 52,804 crore (10.64 per cent hike) for the Indian Navy.
An analysis of defence budgets show that over the past ten years the expenditure under the defence budget has been increasing and forms nearly two thirds of the budget (9 per cent increase).