New Delhi: Finance Minister Nirmala Sitharaman presented the first budget of Modi Government 3.0 on Saturday in Lok Sabha. During her hour-long speech, the finance minister made a slew of announcements for all important sectors, starting from agriculture to railways to denfense. The Modi government has allocated Rs 6,81,209 crore to the Ministry of Defense. Out of the total amount, the central government has earmarked Rs 1,61,528 crore exclusively for the purchase of weapons. The military will use this budget to procure fighter jets, tanks, ammunition, missiles, and other defense equipment.
The budget for defense is around 1.9 per cent of the projected GDP and the increase in the allocation is around 6.2 per cent if compared to the revised allocation of Rs 6.41 lakh crore for the current fiscal. The increase in allocation comes to 9.53 per cent if compared with the budgetary estimate of Rs 6.22 lakh crore for 2024-25.
It is important to note that although India has increased its defense budget, the share of GDP allocated to defense has declined since the COVID-19 pandemic. In 2020-21, defense spending accounted for 2.3 percent of GDP, but between 2021-22 and 2024-25, it fell to 2.1 percent. Despite an increase in defense expenditure for 2024-25, it dropped below 2% for the first time in a decade.
In the previous financial year, the government had allocated Rs 6.2 lakh crore for defense. According to data from the Stockholm International Peace Research Institute (SIPRI), India was the fourth-largest military spender in 2023, with its defense expenditure amounting to one-tenth of the U.S. spending. In 2023, China’s military spending was 1.2% of its GDP.
Defence Minister Rajnath Singh welcomed the overall allocation for the defence budget saying Prime Minister Narendra Modi’s vision of making India self-reliant in defence sector has got a big boost.
The capital outlay of 1,80,000 crore for defence forces will further help in the modernisation, technological advancement and capabilities of our defence forces, he said.
This budget will further strengthen the security and ensure the prosperity of the country and take a “big leap” in realising the vision of Viksit Bharat (developed India), he said. Under capital expenditure, Rs 48,614 crore has been set aside for aircraft and aero engines while Rs 24,390 crore is allocated for the naval fleet.
An amount of Rs 63,099 crore has been set aside for other equipment.
A separate allocation of Rs 4,500 crore has been made for naval dockyard projects.
“In the current geopolitical scenario where the world is witnessing a changing paradigm of modern warfare, Indian armed forces need to be equipped with state-of-the-art weapons and have to be transformed into a technologically-advanced combat-ready force,” the defence ministry said referring to the capital outlay.
Notably, China spends the most on its military in Asia, followed by India in second place. Pakistan ranks third among Asian countries in terms of defense expenditure.
Pakistan’s Finance Minister Muhammad Aurangzeb presented a budget of PKR 18.87 trillion, out of which PKR 2,12,200 crore was allocated for defense. This accounts for only 1.7 percent of its GDP. Pakistan’s defense budget remained nearly the same as the previous year when PKR 1,80,000 crore was allocated for FY 2023-24.
According to Pakistan’s Economic Survey, the neighboring country cut its defense expenditure in 2020. While Pakistan spent 2.3 percent of its GDP on defense in 2016, the spending increased to 2.5 percent in 2017 and 2.6 percent in 2018. However, from 2018 to 2020, there was no further change.
However, the figures released by the government may not reflect the actual picture of defense spending, as many military-related expenditures are included under the civilian budget.
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