Why in the News?

Union Finance Minister Nirmala Sitharaman has allocated ₹6.22 lakh crore for the Defence Ministry for 2024-25, matching the amount presented in the interim Budget in February.

Budgetary allocation for different sectors 

• Border Roads Organisation (BRO): The BRO received a significant increase in funding, with an allocation of ₹6,500 crore, aimed at improving border infrastructure and promoting socio-economic development in border areas.
• Indian Coast Guard: The allocation for the Indian Coast Guard is ₹7,651.8 crore, which is 6% lower than the revised estimates for FY24. Of this, ₹3,500 crore is designated for capital expenditure to enhance maritime capabilities.
• Innovation in Defence: An additional ₹400 crore has been allocated for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, aimed at engaging startups and MSMEs in developing indigenous defence technologies.
• Overall Allocation Breakdown: The allocation for the Defence Ministry includes 27.66% for capital expenditure, 14.82% for revenue expenditure, 30.66% for pay and allowances, 22.7% for defence pensions, and 4.17% for civil organizations under the Defence Ministry.

Marginal Capex Push

• Slight increase in capital expenditure: The budget reflects a marginal increase in capital expenditure, focusing on strengthening the capabilities of the armed forces and enhancing domestic procurement.
• Strategic infrastructure development: The increased allocation to the BRO and the Coast Guard indicates a strategic push towards improving infrastructure in border areas and maritime security, though the overall capital push remains modest.
• Focus on Indigenous solutions: The emphasis on domestic capital procurement and innovation through the iDEX scheme aims to bolster self-reliance in defence technology, fostering a more robust Indigenous defence industry.
• Long-term strategic goals: The allocations are aligned with long-term strategic goals, including enhancing operational preparedness and infrastructure development in sensitive regions, although the overall growth in capital expenditure may be viewed as conservative.
• Balancing defence needs with budget constraints: While the budget seeks to address critical defence needs, the slight reduction in the overall percentage of the budget allocated to defence suggests a balancing act between defence priorities and other pressing social and economic needs.

Way forward: 

• Enhance Focus on Indigenous Production: The government should further promote indigenous production capabilities by increasing investments in research and development, and by providing incentives for domestic manufacturers to produce advanced defence technologies.
• Strengthen Infrastructure Development: The need for continued emphasis on infrastructure projects, particularly in border areas, should be prioritized to enhance national security and socio-economic development, ensuring that allocations are effectively utilized for maximum impact.

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