The Defence Budget FY25 saw a moderate outlay of ₹6,21,540.85 crore which is 4.72 per cent more than the previous FY24 allocation, with ₹1.72-lakh crore singled out for capital acquisition to meet requirements of tri-services while the revenue expenditure other than for salary has been pegged at ₹92,088 crore.

“The Ministry of Defence (MoD) continues to receive the highest allocation among the Ministries. The budgetary allocation to Defence for FY25 is higher by approximately one lakh crore (18.35 per cent) over the allocation for the FY23 and 4.72 per cent more than allocation of FY24. Of this, a major share of 27.67 per cent goes to capital, 14.82 per cent for revenue expenditure on sustenance and operational preparedness, 30.68 per cent for pay and allowances, 22.72 per cent for defence pensions and 4.11 per cent for civil organisations under MoD,” the Ministry said after the interim Budget was presented in parliament by Finance Minister Nirmala Sitharaman on Thursday.

Defence Rajnath Singh congratulated Sitharaman for presenting a positive and encouraging ‘Interim Budget’, which outlines the vision for a confident, strong and self-reliant ‘Viksit Bharat’. The Budget gives a glimpse of India’s rapid economic transformation, inspired by Prime Minister Shri Narendra Modi’s vision of making India a developed nation by 2047, he said on a post on X.

Capex

The capital expenditure allocation for this fiscal is 20.33 per cent higher than the actual expenditure of FY23 and 9.40 per cent more than the Revised Allocation of FY24, said the MoD. The enhanced budgetary allocation, which is in line with the long-term Integrated Perspective Plan (LTIPP) of the three services, will fund planned modernisation of existing Su-30 fleet along with additional procurement of aircraft, acquisition of advanced GE engines for existing MiG-29 fighter jets and transport aircraft C-295 developed by Tata Advanced Systems Limited in collaboration with Airbus and missile systems.

The Ministry stated that the LCA MK–I IOC/FOC configuration, which is to enhance refuelling capacity, 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, among others will all materialise through this allocation.

“The sizeable allocation under capital is centred 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,” read the MoD note.

Revenue expenditure

Allocation to the armed forces for revenue expenditure (Other than Salary) meant for sustenance and operational commitment for FY25 continues to be high at ₹92,088 crore, which is 48 per cent higher than the budgetary allocation of FY23, and aimed at resolving grievance of forces, it said. During the mid-year review, the allocation on this head was increased by 82 per cent over the budgetary allocation of FY23 crossing the figure of ₹1-lakh crore for the first time, the Ministry stated.

This is aimed at providing best maintenance facilities and support system to all platforms, including aircraft and ships. It also facilitates procuring of ammunition, mobility of resources, movement of personnel, catering to day-to-day expenditure of Armed Forces in strengthening the deployment in forward areas and keeping the forces always ready to take care of any eventuality.

Defence Pension Budget

The MoD said, the total budgetary allocation on account of defence pensions is ₹1,41,205 crore which is 2.17 per cent 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.

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