As part of the General Budget presented by Finance Minister Nirmala Sitharaman on February 1, the allocation for defence for the financial year 2025-26 has seen a major hike of 9.5 per cent compared to the previous financial year. This year, Rs 6,812,10 crores have been allotted to the Ministry of Defence (MoD) whereas the outlay for defence in the previous year was Rs 6,21,940 crores. Rajnath Singh, Defence Minister (Raksha Mantri) has hailed the budget which is aimed at modernisation, indigenisation (Atma Nirbharta) and welfare of serving and ex-servicemen. On the whole, the new defence budget is aligned to support and maximise the gains from the Defence Reforms 2025, enunciated by the MoD on January 1 this year.
First, some statistics. In terms of the Gross Domestic Product (GDP), the defence budget represents just 1.9 per cent. We must remember that India is world’s fifth largest economy in terms of the GDP and thus this percentage is also substantial. The highest military spending is obviously by the US, at 3.4 per cent of GDP, followed by China at approximately 3.0 per cent of GDP (based on the estimates of proclaimed & actual defence expenditure), Russia at 5.9 per cent of GDP, India is at fourth position at 1.9 per cent and Saudi Arabia is fifth at whopping 7.1 per cent of GDP. Given the precarious condition of its economy, Pakistan still spends 2.9 per cent of the GDP on defence. India has a land border of approximately 15,200 km and a coast line of 7517 km. With two known adversaries in Pakistan to its West and China to its North and East, India perforce has to keep a large standing Armed Forces, which roughly number 14 lakh, with Army having a major share at about 12 lakhs. China has the largest military with over 20 lakh active personnel; Indian Army is the second largest. Therefore, to keep such a large Indian Armed Forces, annual expenditure has to keep pace with rest of the world, with particular focus on the state of adversarial military.
Now let us look at the breakdown of the defence budget in the major heads. The modernisation of the Armed Forces has been allocated 1.80 lakh crores, which is 5 per cent more than the last year’s allocation. Major chunk of the modernisation is consumed by the weapon platforms of Indian navy and Indian Air Force, which are comparatively much costlier than those of the Indian Army. The revenue budget which is meant for pay & allowances, fuel, ammunition and maintenance has been given 3.11 lakh crore, which is more than 10 per cent increase over last year. Defence pensions account for 1.61 lakh crore, which supports approximately 34 lakhs defence & civilian defence employees pensionary benefit. The government has further improved One Rank One Pension (OROP) scheme which shows its commitment to the welfare of the veterans. The defence budget also includes Rs 26,817 crore to DRDO, Rs 9677 crore to Indian Coast Guard, Rs 7146 crore to Border Roads Organisation (BRO) and Rs 8313 crore for Ex Servicemen Welfare Scheme. Even NCC with a pan India presence has a much higher allocation of Rs 2900 crore, which is also partly funded by the state governments. Thus, the defence budget is a healthy mix of catering the needs of men, veterans, material and future requirements.
In order to give impetus to the ongoing and future reforms, it was unanimously decided by the MoD to declare the year 2025 as the ‘Year of Defence Reforms’ in India. The nine proposed reforms in the defence sector are: Bolster Jointness & Integration leading to establishment of Theatre Commands, Focus on new domains of cyber, space, robotics and AI, Inter-service cooperation & training, Faster acquisition process for capability development, Public-private partnership in defence production, Collaboration and effective civil-military coordination, Defence Exports, Welfare of veterans & leveraging their expertise and lastly Sense of pride in Indian culture & values that suit nation’s conditions.
Among the nine proposed reforms, capability development of the armed forces with indigenous military hardware is the focus of Modi government. Accordingly, Rs.1,80,000 crore i.e. approximately 26 per cent of the total defence budget allocation has been earmarked for Capital Head. With the money from the Capital Head, Armed forces would be equipped with state of art weapons, ammunition and equipment which would transform them into a technologically advanced modern fighting force. Even here the focus is on procuring 75 per cent of the modernisation through domestic sector, thus focus is on Atma Nirbharta. With the support of the private defence industry and investment in R&D, the defence exports are likely to fetch Rs. 50, 000 crore this financial year. The new Defence Secretary, Shri Rajesh Kumar Singh, IAS has assumed the appointment on 1 November last year and thus he is likely to provide continuity in ushering the defence reforms and building critical capability development of the armed forces.
The defence budget accounts for 8 per cent of the total budgetary outlay in the financial year 2025-26. The proposed defence reforms are going to be capital intensive for a few more years and thus the increase in defence budget is aligned towards the proposed reforms. The allocation approximately Rs. 6.8 lakh crore on defence budget is roughly equal to four months of total GST collection in the country. On the face of it, the allocation may appear high to a common citizen. But I urge the citizens of our country to view it as insurance premium for the national security and defence of the nation. In addition, Indian Armed Forces contribute significantly towards nation-building, directly and indirectly. Thus, the defence budget is well spent in the national cause with commensurate dividends in every corner of the country.
Prime Minister Modi called the present budget a ‘Force Multiplier’ towards making a Viksit Bharat @ 2047. Force Multiplier is a military term which means a capability or force which significantly enhances the effectiveness of the military force, allowing them to achieve much more with less. For example, our own BrahMos missile is a force multiplier. The proposed defence budget is going to be a force multiplier for the Indian Defences Forces in their quest for a technologically advanced combat ready force. This defence budget is appropriately aligned to the defence reforms which are going to transform the armed forces, with capability of multi-domain integrated operations along the land, air and maritime borders as also to secure India’s global interests.
