Budget 2023: India hikes defence budget with eye on China border row

The defence budget was on Wednesday increased to Rs 5.94 lakh crore for 2023-24 in a modest hike of 13 per cent from last year's allocation of Rs 5.25 lakh crore amid India's continuing border row with China in eastern Ladakh and concerns over frequent Chinese forays into the Indian Ocean Region.

In the Union Budget presented in Parliament by Finance Minister Nirmala Sitharaman, a total of Rs 1,62,600 crore was set aside for the armed forces as capital expenditure that largely includes purchasing new weapons, aircraft, warships and other military hardware.

"The armed forces have to be battle ready to meet any eventuality. Towards that end, non-salary revenue outlay has been enhanced significantly from Rs 62,431 crore in Budget Estimates (BE) 2022-23 to Rs 90,000 crore in BE 2023-24, representing a 44 per cent jump," the defence ministry said.

For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore but the revised estimate showed the expenditure at Rs 1.50 lakh crore.

According to the budget documents, an allocation of Rs 4,22,162 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments.

The amount included Rs 1,38,205 crore for defence pensions, Rs 2,70,120 crore for defence services and Rs 13,837 crore for the Ministry of Defence (Civil).

The ministry said the capital outlay is expected to close critical gaps in combat capabilities and equip the forces in terms of ammunition, sustenance of weapons, assets and military reserves.

The capital outlay for the Indian Air Force was the highest at Rs 57, 137.09 crore which included Rs 15,721 crore for procurement of aircraft and aero-engines and Rs 36,223.13 crore for other equipment.

An amount of Rs 52,804 crore was set aside as the capital outlay for the Indian Navy as against Rs 47,590 crore given to the force in 2022-23.

The capital outlay for the Army has been pegged at Rs 37,241 crore against last year's outlay of Rs 32,015 crore.

Dr Laxman Kumar Behera, Associate Professor at Special Centre for National Security Studies at Jawaharlal Nehru University, said the increase in the allocation has been satisfactory considering the economic headwinds in view of the impact of various global developments.

"The budget has given the armed forces a modest hike. The capital outlay for the Indian Navy has been on an upswing for the last few years because of China's increasing presence in the Indian Ocean Region. This is a significant aspect in the defence budget for 2023-24 as well," Behera told PTI.

With a focus on boosting border infrastructure, the capital outlay for the Border Roads Organisation (BRO) has been increased to Rs 5,000 crore as against Rs 3,500 crore in 2022-23, marking an increase of 43 per cent.

"MoD is committed towards infrastructure strengthening in the border areas, particularly the northern borders. Accordingly, the capital budget of Border Roads Organisation (BRO) has increased by 43 per cent to Rs 5,000 crore in FY 2023-24 as against Rs 3,500 crore in FY 2022-23," Rajnath Singh tweeted.

The Defence Research and Development Organisation (DRDO) has been earmarked an outlay of Rs 23,264 crore which is a hike of nine per cent against last year's allocation.

"The Union Budget for the Financial Year 2023-24 envisages a total outlay of Rs. 45,03,097 crore."

"Of this, the Ministry of Defence has been allocated a total Budget of Rs 5,93,537.64 crore, which is 13.18 per cent of the total GoI Budget," Defence Minister Rajnath Singh tweeted.

The capital allocations of Rs 1,62,600 crore marked a hike of Rs 10,230 crore over last year's outlay and it is a 6.7 per cent increase.

Former Deputy Chief of Army Staff Lt Gen (retd) Subrata Saha said the budget intends to boost manufacturing and build on India's strength in the digital domain.

"In defence, domestic manufacturing will get further impetus with efforts to also increase exports from India," he said.

Saha said the increase in the allocation for the Border Roads Organisation (BRO) will push the border connectivity infrastructure.

The defence ministry said the increase in the capital budget since 2019-20 has been Rs 59,200 crore which it said is a 57 per cent rise.

"This increase is a reflection of the government's commitment towards sustainable augmentation in the area of modernisation and infrastructure development of the defence services," it said.

According to the budget documents, an allocation of Rs 2,70,120 crore has been made to the armed forces for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments.

The budgetary allocation of revenue expenditure in 2022-23 was Rs 2,33,000 crore.

In the budget for 2023-24, the capital outlay for the Ministry of Defence (Civil) has been pegged at Rs 8774 crore. The total capital outlay considering Rs 1,62,600 crore for the armed forces and Rs 8,774 crore to defence ministry comes to Rs 1,71,374 crore.

The revenue expenditure for the Army has been put at Rs 1,82,649 crore followed by Rs 44,345 crore for the IAF and Rs 32,284 crore for the Indian Navy.

Under the revenue outlay, the Indian Navy has been allocated an amount of Rs 32,284.20 crore as against a budgetary allocation of Rs 25,406.42 crore and a revised estimate of Rs 30,734.58 crore for 2022-23.

The revenue expenditure of the Indian Air Force has been projected at Rs 44,345.58 crore as against a budgetary outlay of Rs 32,873.46 crore and a revised estimate of Rs 44,728.10 crore for 2022-23.

The defence pension budget of Rs 1,38, 205 crore is a jump of 15.5 per cent against Rs 1,19,696 crore in 2022-23.

The revised estimate of defence pension for 2022-23 was pegged at Rs 1,53,415 crore which is a jump of Rs 33,718 crore over the budget estimate.

"This includes an amount of Rs 28,138 crore to meet the requirement on account of revision of Armed Forces Pensioners/Family Pensioners under One Rank One Pension (OROP)," the defence ministry said.

It also said that Union Budget 2023-24 has provided "Exempt-Exempt-Exempt (EEE)" status to the Agniveer Fund.