The Defence Ministry has been allotted Rs 5.93 lakh crore, up from Rs 5.25 lakh crore in the 2022-23 budget. There is a 12.95 per cent hike in the total Budget compared to last year’s revised estimate...
Defence Budget Move Towards Atma Nirbharta And Improving
Security Environment
The defence ministry has been allotted at
₹5.93 lakh crore, up from ₹5.25 lakh crore in the 2022-23 budget. There is 12.95% hike in the total budget compared to last years revised
estimate’s(money that was actually spent)
Capital expenditure increased but not adequate
A total of Rs 1.62 lakh crore has been set
aside for capital expenditure that includes purchasing new weapons, aircraft,
warships and other military hardware, The capital outlay has been hiked to ₹1.62 lakh crore, a ₹10,000
crore hike from last time. The armed forces have not been able to spend the
full amount of ₹1.52 lakh crore allotted in the last budget. This is because of
the air force surrendering ₹1,837 crore as per the revised estimates.
The relatively small hike in capital
expenditure has resulted in disappointment for the industry. "Capex for
defence gets a nominal increase of 7% vs 33% increase in the nation's overall
capital expenditure commitment. This capex allocation misses on the
government's impetus on defence manufacturing.
The government also increased the capital
budget of Border Roads Organisation by 43% to ₹5,000 crore against ₹3,500 crore
in FY23.The increase will boost border infrastructure and assist in
implementing projects like the Sela Tunnel, Nechipu Tunnel and Sela-Chhabrela
Tunnel, Which will improve defensive
preparedness and capability to move troops from the rear areas into forward
areas on the Indo China border.
Capital expenditure in the defence sector is
crucial for India’s aim to become self-reliant in defence manufacturing and to
meet a rising challenge from China and Pakistan by creating infrastructure and
adopting modern technology. The government, in the last few years, has
encouraged domestic manufacturing while reducing exports under the defence
ecosystem of India. The exports in the sector surged nearly eight times to Rs
12,815 crore in 2021-22 from Rs 1,521 crore in 2016-17.
PLI
scheme in helping in self sufficiency
In September 2022, the government had
introduced the PLI scheme in order to spur manufacturing of drones and drone
components in India. The defence ministry had,
in December last year, approved the procurement of arms worth over Rs 84,300
crore to boost the combat capabilities of the defence forces. This amount
included approval for six capital acquisitions for the Indian Army, 10 for the
Indian Navy, six for Indian Air Force, and two for Indian Coast Guard.
Revenue
Expenditure increases
The increase in the budget
is mostly on account of a peak in revenue
expenditure (₹2.7 lakh crore) projected for the financial year.
Allocation of Rs 2,70,120 crore has been made
for revenue expenditure that includes expenses on payment of salaries and
maintenance of establishments. The budgetary allocation of revenue expenditure
in 2022-23 was Rs 2,39,000 crore. "The allocation under this segment has
doubled in two years since FY 2021-22.
This will cater to sustenance of Weapon
Systems, Platforms including Ships/Aircrafts & their logistics; boost fleet
serviceability; emergency procurement of critical ammunition and spares;
procuring/hiring of niche capabilities to mitigate capability gaps wherever
required; progress stocking of military reserves, strengthening forward
defences, amongst others.
The enhanced allocations in the Budget will
also cater to Training Aids & Simulators for Agniveers and ensure that they
achieve the set standards of training for induction in the Defence Forces.
The revenue expenditure has increased drastically due to
constant deployment of 50- 60000 troops on the Indo China border to meet
various contingencies of intrusion by the Chinese. In addition the troops have
to be rotated at regular intervals. This results in an increase in revenue
expenditure which possibly cannot be avoided.
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