The allocation to the Ministry of Defence in the Union budget is Rs 6,21,940.85 crore, which is 12.9% of the total budget of the Government of India for FY 2024-25. This is a negligible increase from last year’s budget and would only cater to the increase in salaries and DA. The increase is not enough to take on major big-ticket changes and enhance R&D in defence. The overall aim to challenge the dragon in the Indian Ocean would require a substantial financial outlay and a systematic multi-year plan. The overall planning for expanding the Navy’s footprint seems to have been missed in this budget.
The capital outlay of Rs 1,72,000 crore will strengthen the capabilities of the Armed Forces but is not something to really write home about. Earmarking Rs 1,05,518.43 crore for domestic capital procurement will provide further impetus to the indigenous industry; however, whether this will give us an edge over our adversaries remains to be seen.
Border roads have been given a 30% increase in allocation over the last budget. This allocation of Rs 6,500 crore to BRO will further accelerate our border infrastructure. This is a major boost to defence infrastructure and will also help companies like L&T. This will aid in the rapid mobilization of our forces towards the border with China. The bulk of this money is earmarked for existing projects in Leh, Himachal, and Arunachal. These projects are in various stages of completion and would give the Indian Army a leg up in terms of rapid mobilization.
To boost the startup ecosystem in defence industries, Rs 518 crore has been allocated to the iDEX scheme to fund technological solutions provided by startups, MSMEs, and innovators. No talk about the disinvestment of defence companies has been done yet. Companies like Mazagon Shipyard and Cochin Shipyard were to be disinvested so that private players could infuse fresh money into the system to facilitate the mass production of ships for the Indian Navy. The lack of clarity in the disinvestment process is likely to slow the supply of modern ships and aircraft.
Despite the growing Chinese presence in the region and the buzz related to the modernization of the Indian Armed Forces and infrastructure, the defence budget allocation for the next fiscal has not seen a major year-on-year increase. Most of the increase is related to pay and allowances.
The budget does not seem to have considered strengthening the office of the CDS or pushing towards the theaterization of the forces. No focus on raising an additional mountain strike corps has been seen. The focus on the requirement for an amphibious force, in terms of money allocation, also seems to be lacking.
However, the budget does not take away the momentum of the infrastructure push and self-dependence on technical equipment required for maintaining a healthy deterrence against the enemy’s nefarious designs.
