New Delhi: Finance Minister Nirmala Sitharaman on Saturday, while announcing the budget for 2025, set aside Rs 6.81 lakh crore for defence spending.
This allocation is 9.53% more than the Budgetary Estimate of 2024-25 and stands at 13.45% of the Union Budget, which is the highest among the Ministries.
Out of this total budget, Rs 1,80,000 crore, i.e., 26.43% of the total allocation, will be spent on Capital Outlay on Defence Services, while defence pensions receive a share of Rs 1,60,795 crore, i.e., 23.60%.
The budget signifies the Modi government’s intent to strengthen military preparedness as India navigates an ongoing standoff with China on the northern front, while it also faces other security concerns along its western border with Pakistan and ongoing turbulences in India’s northeast.
Keeping this in mind, Rs 1.80 lakh crore will be spent on capital outlay as compared to Rs 1.72 lakh crore in the previous fiscal year.
This funding is crucial for the modernisation of the armed forces, along with procurements of sophisticated defence equipment and related technology.
It is pertinent to note here that the defence ministry has taken a decision to observe 2025-26 as the ‘Year of Reforms,’ which will further strengthen the resolve of the Government for modernisation of Armed Forces and is aimed at simplification in the Defence Procurement Procedure to ensure optimum utilisation of the allocation.
Similarly, the budgetary allocation to the Defence Research and Development Organisation (DRDO) has also been increased to Rs 26,816.82 crore from Rs 23,855.61 crore in 2024-25, a rise of 12.41%.
Out of this, a major share of Rs 14,923.82 crore has been allocated for capital expenditure and to fund the R&D projects. For the welfare of the veterans and their families, Rs 8,317 crore has been allocated towards the Ex-Servicemen Contributory Health Scheme (ECHS), which is 19.38% higher than the previous year.The Indian Coast Guard (ICG) has also been allotted Rs 9,676.70 crore under the Capital and Revenue Head, which is 26.50% more than the allocation for the previous year.
This increase is primarily in line with the focus of the Government on capability development