Union Budget 2024-25: Defence Ministry Allocated ₹6.21 Lakh Crore to Boost Innovation and Modernization

New Delhi: In the Union Budget 2024-25, the Ministry of Defence (MoD) has been allocated ₹6,21,940.85 crore (approx. $75 billion), the highest among all ministries. This allocation includes an additional ₹400 crore for the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, aimed at fostering innovation in defence technology.

Finance Minister Nirmala Sitharaman announced that the ADITI scheme will engage start-ups, MSMEs, and innovators to develop cutting-edge defence technologies. Under this scheme, grants of up to 50% of the product development budget, with a maximum limit of ₹25 crore per applicant, will be awarded according to existing iDEX guidelines.

The MoD’s allocation for FY 2024-25 represents an 18.43% increase over the FY 2022-23 allocation and a 4.79% increase over FY 2023-24. The budget distribution includes 27.66% for capital expenditure, 14.82% for operational preparedness, 30.66% for pay and allowances, 22.70% for defence pensions, and 4.17% for civil organizations under the MoD. This allocation amounts to approximately 12.90% of the total budgetary estimate for the Union of India.

The capital allocation for the Defence Forces in FY 2024-25 is ₹1.72 lakh crore, a 20.33% increase from the actual expenditure of FY 2022-23 and 9.40% more than the revised allocation for FY 2023-24. This budget aims to address critical capability gaps through significant acquisitions, including advanced technology, lethal weapons, fighter aircraft, ships, submarines, and unmanned aerial vehicles.

In a push for self-reliance, 75% of the modernization budget, amounting to ₹1,05,518.43 crore, is earmarked for procurement through domestic industries. This is expected to have a positive impact on GDP, employment, and capital formation.

The budget includes ₹92,088 crore for operational readiness, a 48% increase from FY 2022-23. This will ensure the Armed Forces remain battle-ready with the best maintenance facilities, support systems, and procurement of necessary ammunition and resources.

For veteran healthcare, ₹6,968 crore has been allocated to the Ex-Servicemen Contributory Health Scheme (ECHS), a 28% increase from the previous year. This follows a 70% increase at the revised estimate stage during FY 2023-24.

To improve border infrastructure, the Border Roads Organisation (BRO) has been allocated ₹6,500 crore, a 30% increase from FY 2023-24 and 160% higher than FY 2021-22. This will support projects like the Nyoma Airfield in Ladakh, Shinku La tunnel in Himachal Pradesh, and Nechiphu tunnel in Arunachal Pradesh.

The Indian Coast Guard (ICG) receives ₹7,651.80 crore, a 6.31% increase from FY 2023-24, with ₹3,500 crore dedicated to capital expenditure for acquiring advanced patrolling vehicles, electronic surveillance systems, and weapons.

The Defence Research and Development Organisation (DRDO) sees an increased allocation of ₹23,855 crore, with ₹13,208 crore for capital expenditure. The Technology Development Fund (TDF) scheme will receive ₹60 crore to support start-ups, MSMEs, and academia in developing innovative technologies.

The iDEX initiative’s budget has been increased from ₹115 crore in FY 2023-24 to ₹518 crore in the current fiscal year, promoting the development of defence technology solutions by start-ups and innovators.

The defence pension budget for FY 2024-25 is ₹1,41,205 crore, a 2.17% increase from FY 2023-24. This will support approximately 32 lakh pensioners through the System for Pension Administration (Raksha) or SPARSH and other disbursing authorities.

Defence Minister Rajnath Singh praised the budget as excellent, highlighting its role in moving towards a prosperous and self-reliant ‘Viksit Bharat’. He emphasized that the capital outlay of ₹1.72 lakh crore would strengthen the Armed Forces’ capabilities and promote ‘Aatmanirbharta’ in defence through domestic capital procurement.