Budget 2024-25: Rs 1.05L cr grant, shot in the arm for domestic defence industry

Ajay Banerjee

New Delhi, July 23

To provide further impetus to “atmanirbharta” (self-reliance) in the defence sector, the government has set aside Rs 1.05 lakh crore, a major chunk of Rs 1.72 lakh crore capital outlay for the Ministry of Defence, for the procurement of weapons and military equipment from domestic sources. This is in line with the Centre’s goal of achieving self-reliance in the crucial defence sector.

“The allocation is aimed at filling capability gaps through big-ticket acquisitions of state-of-the-art technology, lethal weapons, fighter aircraft, ships, submarines, platforms, unmanned aerial vehicles, drones and specialist vehicles,” the Ministry of Defence (MoD) said in statement.

The Union Budget has allocated Rs 6,21,940.85 crore for the MoD, the highest among all ministries. The allocation has been hiked by 4.79 per cent from the last year’s outlay of Rs 5,93,537 crore. It is 12.90 per cent of the total Budget for the ongoing fiscal.

More money has been allocated for building infrastructure in the Himalayas facing China, R&D and for sourcing niche technology for ships, planes, submarines and high tech equipment.

The capital allocation for the IAF is Rs 58,111 crore, majorly for fighter jets. The Navy gets Rs 51,052 crore, of which a majority is for force accretions with 66 ships and submarines being developed. The Army gets Rs 37,411 crore for sourcing new weapons equipment planes, copters, tanks, guns, etc.

Notably, an operational allocation, separate from capital budget, of Rs 92,088 crore has been provided. This is aimed at sourcing ammunition and maintaining platforms, including aircraft, ships and vehicles, and strengthening the deployment in forward areas in unforeseen situations.

For border infrastructure, the Border Roads Organisation (BRO) will get Rs 6,500 crore, which is 30 per cent more than the previous year. Among the projects covered are Nyoma Airfield in Ladakh at an altitude of 13,700 ft and the 4.1-km strategic Shinku La tunnel in Himachal Pradesh.

The allocation for the Defence Research and Development Organisation (DRDO) is Rs 23,855 crore. Of this, a major share of Rs 13,208 crore is allocated for capital expenditure targeted for new technology with special focus on fundamental research, funding new startups, MSMEs and academia, attracting young bright minds interested in innovation and developing niche technology in collaboration with the DRDO. The allocation for defence pension is Rs 1,41,205 crore, 2.17 per cent higher than the previous year.

Defence Minister Rajnath Singh has termed the Budget as excellent and outstanding.

Slightly up

Rs 6,21,940.85 cr
Total allocation

Rs 5,93,537 cr
Last year’s outlay

Rs 92,088 cr
Operational allocation

Rs 58,111 cr
IAF, majorly for jets

Rs 51.052 cr
Navy for accretions

Rs 37,411 cr
Army for arms, copters

Rs 23,855 cr
DRDO

Rs 6,500 cr
for BRO