India’s Interim Budget for 2024 has allocated ₹6.21 lakh crore ($97.9 billion) for defense, marking a 4.72% increase compared to the previous year. The budget, which accounts for 1.89% of the country’s projected GDP for 2024-25, includes a revenue expenditure of ₹2.82 lakh crore, capital outlay of ₹1.72 lakh crore, and pension outlay of ₹1.41 lakh crore.
The enhanced capital outlay aims to address critical capability gaps and promote self-reliance in the defense sector. It will support the modernization of the armed forces with the acquisition of fighter jets, helicopters, warships, tanks, artillery guns, rockets, missiles, unmanned capabilities, and other combat systems.
The defense ministry stated that the budget will fund the planned modernization of existing Sukhoi-30 fleet, procurement of additional aircraft, acquisition of advanced engines for MiG-29s, acquisition of C-295 transport aircraft, missile systems, deck-based fighters, and submarines.
To further strengthen deep tech in the defense sector, Finance Minister Nirmala Sitharaman announced a new scheme in the budget speech. The scheme aims to boost indigenous innovation and advance cutting-edge technologies such as artificial intelligence, quantum computing, robotics, and cybersecurity. Details of the scheme were not immediately available.
The budget also reflects the government’s commitment to improving border infrastructure. The Border Roads Organization, responsible for India’s border infrastructure push, has been allocated ₹6,500 crore ($1.02 billion), a 30% increase compared to the previous year, due to continued threat perception at the India-China border.
The defense budget for 2024-25 represents 13.04% of the total budget and underscores the government’s efforts to promote self-reliance and exports. It is expected that a significant portion of this year’s allocation will be utilized for procurement through domestic sources, leading to the production of locally manufactured next-generation weapon systems. This development is anticipated to have a positive impact on the GDP, employment, capital formation, and the domestic economy.
The defense budget increase, while marginally lower than last year’s revised estimates, highlights the government’s focus on modernizing the armed forces and strengthening India’s defense capabilities. With the new scheme for deep tech and the allocation for critical infrastructure, the government seeks to bolster the defense sector, encourage innovation, and ensure the country’s readiness in the face of evolving geopolitical scenarios.
