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In a significant development, the Finance Minister of India, Smt. Nirmala Sitharaman, presented the Union Budget for the Financial Year 2024-25 on February 1, 2024. A notable highlight of the budget is the allocation for the Defence sector, which has seen a substantial increase, reflecting the government's commitment to bolstering national security, promoting self-reliance, and enhancing strategic capabilities. This news analysis delves into the key aspects of the Defence Budget, shedding light on the allocations, priorities, and the broader implications for India's defence and geopolitical standing.

<img loading="lazy" alt="Budget 2024 defence budget" src="https://study.kdcampus.live/admin/assets/uploads/ckeditor/Budget_2024_defence_budget.webp" style="height:338px; width:600px">

(Source: India TV News)

<h2 id="content-id-94940-0">Defence Budget Overview</h2>

High Allocation Reflects Strategic Priorities

The Defence Budget for the Financial Year 2024-25 has reached a staggering Rs 6,21,540.85 crore, constituting 13.04% of the total Union Budget. This allocation represents a noteworthy increase of approximately one lakh crore (18.35%) over the allocation for the FY 2022-23 and a 4.72% rise from the allocation of FY 23-24. The Ministry of Defence (MoD) continues to receive the highest allocation among all ministries, emphasizing the government's commitment to national security.

<h2 id="content-id-94940-1">Capital Expenditure: Fostering 'Aatmanirbharta'</h2>

Strategic Investments for Modernization

A significant portion of the Defence Budget, 27.67%, is dedicated to capital expenditure, demonstrating a commitment to modernize the Armed Forces and fill critical capability gaps. The allocation of Rs 1.72 lakh crore for capital expenditure is 20.33% higher than the actual expenditure of FY 22-23 and 9.40% more than the Revised Allocation of FY 23-24. This upward trend in capital expenditure aligns with the Long Term Integrated Perspective Plan (LTIPP) of the three Services, aiming to acquire state-of-the-art weaponry, fighter aircraft, ships, platforms, unmanned aerial vehicles, and drones.

<h2 id="content-id-94940-2">Strategic Acquisitions and 'Make in India' Initiative</h2>

Boosting Indigenous Defence Manufacturing

The budget emphasizes the 'Make in India' initiative by allocating funds for the modernization of existing fleets, including the Su-30 and MiG-29, acquisition of transport aircraft C-295, and missile systems. Additionally, funding for the Light Combat Aircraft (LCA) MK–I IOC/FOC configuration underscores the commitment to indigenous production of cutting-edge technology. The Indian Navy's projects, such as the acquisition of deck-based fighter aircraft and submarines, are also set to materialize through this budget, fostering self-reliance and contributing to economic growth.

<h2 id="content-id-94940-3">Economic Impact: Multiplier Effect in Defence Spending</h2>

Boosting Ship-Building Sector and GDP

The Economic Survey of India report for 2023 highlights the investment multiplier in the ship-building sector, emphasizing that an infusion of approximately Rs 1.5 lakh crore in naval ship-building projects could generate a circulation of Rs 2.73 lakh crore, showcasing the significant economic impact of defence spending.

<h2 id="content-id-94940-4">Jointness Among Services: Flexible Financial Management</h2>

Consolidation of Expenditure

A noteworthy shift in the budgetary approach is the government's conscious call to foster jointness among the services by consolidating the demand of the three services into similar items of expenditure. This includes land, aircraft, aeroengines, heavy and medium vehicles, allowing for flexibility in financial management and expedited decision-making. This mechanism aims to ensure better utilization of the capital budget among the three services based on their priorities.

<h2 id="content-id-94940-5">Revenue Expenditure: Sustaining Operational Readiness</h2>

<img loading="lazy" alt="Budget 2024 Revenue Expenditure" src="https://study.kdcampus.live/admin/assets/uploads/ckeditor/Budget_2024_Revenue_Expenditure.webp" style="height:450px; width:600px">

(Source: Times of India)

Allocation for Operational Commitment

The allocation for revenue expenditure (other than salary) for the Armed Forces in FY 24-25 stands at Rs 92,088 crore, a 48% increase from the budgetary allocation of FY 2022-23. This allocation is crucial for sustaining operational readiness, providing maintenance facilities, supporting day-to-day expenditure, and strengthening deployment in forward areas.

<h2 id="content-id-94940-6">Defence Pension: Addressing the Needs of Veterans</h2>

Increased Allocation for Pension

The Defence Pension Budget has seen an increase to Rs 1,41,205 crore, reflecting a 2.17% rise from the allocation made in 2023-24. This budget is directed towards the monthly pension for approximately 32 lakh pensioners, ensuring their financial well-being through schemes like SPARSH.

<h2 id="content-id-94940-7">Ex-Servicemen Welfare Scheme (ECHS): Unprecedented Allocation</h2>

Enhancing Healthcare Facilities for Veterans

The total allocation to the Ex-Servicemen Welfare Scheme for FY 2024-25 is 28% higher than the allocation for FY 23-24, underlining the government's commitment to providing better healthcare facilities to ex-servicemen, war veterans, Veer Naris, and their family members. The increased budget takes into account medical treatment-related expenditures during the COVID-19 period.

<h2 id="content-id-94940-8">Border Infrastructure: Addressing Strategic Imperatives</h2>

Boosting Infrastructure at Indo-China Border

In response to the continued threat perception at the Indo-China border, there is a significant increase in the capital budget allocation to the Border Roads Organisation. The allocation of Rs 6,500 crore for FY 24-25 is 30% higher than the allocation for FY 23-24 and 160% higher than the allocation of FY 2021-22. This allocation signifies the government's commitment to improving border infrastructure, promoting socio-economic development, and boosting tourism in the border regions.

<h2 id="content-id-94940-9">Indian Coast Guard: Strengthening Maritime Capabilities</h2>

Capital Expenditure for Advanced Capabilities

The Indian Coast Guard receives an allocation of Rs 7,651.80 crore for FY 2024-25, reflecting a 6.31% increase over the allocation of FY 2023-24. A notable aspect is the allocation of Rs 3,500 crore specifically for capital expenditure, focusing on acquiring fast-moving patrolling vehicles, advanced electronic surveillance systems, and weapons to address emerging challenges in the maritime domain.

<h2 id="content-id-94940-10">Defence Research and Development: Promoting Innovation</h2>

<img loading="lazy" alt="Budget 2024 Defence R&D" src="https://study.kdcampus.live/admin/assets/uploads/ckeditor/Budget_2024_Defence_R&D.webp" style="height:338px; width:600px">

(Source: The Economic Times)

Increased Allocation for DRDO and Technology Development Fund

The budgetary allocation for the Defence Research and Development Organisation (DRDO) has been increased to Rs 23,855 crore, with a significant share allocated for capital expenditure. This funding aims to strengthen DRDO's capabilities in developing new technologies, emphasizing fundamental research, and supporting collaboration with private entities through the Development-cum-Production partner model. The Technology Development Fund (TDF) scheme, with an allocation of Rs 60 crore, is designed to encourage innovation by startups, MSMEs, and academia in collaboration with DRDO.

<h2 id="content-id-94940-11">Raksha Mantri's Perspective: Confidence in Economic Transformation</h2>

Positive Reception and Economic Outlook

Raksha Mantri Shri Rajnath Singh congratulated Finance Minister Smt Nirmala Sitharaman for presenting a positive and encouraging 'Interim Budget.' Singh highlighted the alignment of the budget with Prime Minister Shri Narendra Modi's vision for a confident, strong, and self-reliant India. He commended the substantial push for infrastructure, construction, manufacturing, housing, and technology development in the budget. The increase in capital expenditure outlay was described as a massive push that aligns with the goal of making India a five trillion dollar economy by 2027.

<h2 id="content-id-94940-12">Global Standing: India's Military Strength Rankings</h2>

India's Rise in Military Strength

India has emerged as a major superpower in the area of defence, standing at the fourth spot in Global Firepower's Military Strength Rankings for 2024. Surpassing nations like the United Kingdom and Japan, India's ranking is attributed to an estimated total of 5,137,550 military personnel. The United States, Russia, and China lead the rankings.

Strategic Investments for a Confident India

The Defence Budget for FY 2024-25 reflects India's strategic priorities, emphasizing self-reliance, modernization, and operational readiness. The substantial increase in allocations for capital expenditure, along with a focus on 'Make in India,' underscores the government's commitment to enhancing the country's defence capabilities. The budget not only addresses immediate security concerns but also contributes to economic growth through the multiplier effect, job creation, and the promotion of indigenous defence manufacturing. As India solidifies its position on the global stage, the budget sets the stage for a confident and self-reliant nation in the realm of defence and security.

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Important News Analysis of 4th February 2024

India's Defence Budget 2024-25 Unveiled with Focus on Self-Reliance and Strategic Modernization

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India's FY 2024-25 Defence Budget of Rs 6.21 lakh crore focuses on self-reliance, modernization, and operational readiness, strengthening national security.

Capital Expenditure: Fostering 'Aatmanirbharta'

Strategic Acquisitions and 'Make in India' Initiative

Economic Impact: Multiplier Effect in Defence Spending

Jointness Among Services: Flexible Financial Management

Revenue Expenditure: Sustaining Operational Readiness

Defence Pension: Addressing the Needs of Veterans

Ex-Servicemen Welfare Scheme (ECHS): Unprecedented Allocation

Border Infrastructure: Addressing Strategic Imperatives

Indian Coast Guard: Strengthening Maritime Capabilities

Defence Research and Development: Promoting Innovation

Raksha Mantri's Perspective: Confidence in Economic Transformation

Global Standing: India's Military Strength Rankings

India's Defence Budget 2024-25 Unveiled with Focus on Self-Reliance and Strategic Modernization

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