DEFENCE BUDGET TO BE REDEFINED TO ACHIEVE STRATEGIC TARGET OF DEVELOPED MILITARY OF 2047

The allocation to the defence budget is under two important major heads of Capital and Revenue expenditures. Expenditure under the Revenue head comprises military pay and allowances inclusive of civil defence employees from Ordnance Factories and other defence establishments.

- Major General J.K.S. Parihar

Indian Armed Forces is undergoing the biggest transformation and restructuring in its functional and operational capabilities since independence. Over and above the emerging geopolitical challenges, to remain a compatible and major force to be reckoned with in 2047, the dynamic doctrine deserves major consideration and planning in the mode of self-reliance and budget allocation with broad perspectives.

India has the third-largest military in the world and is the sixth-largest spender in defence. However, the defence budget allocation for FY 2024-25 is around USD 72.2 billion, which is much lower than USD 849 billion by the USA and 237 billion USD by China (excluding around estimated opaque expenditures of USD 300 billion). Pakistan's defence budget is USD 7.64 billion for the current FY, whereas the defence spending of Russia is close to $145 billion, which amounts to 6.33% of GDP. In contrast to the defence expenditure by these countries, even though defence expenditure by India has been showing a rising trend of an average of 8 to 10% per annum since the last decade. However, considering the average inflation rate of around 6% and the altered parity of the rupee compared to the USD, the budget allocation remains more or less standstill, rather marginally less compared to the effective value of the previous years.

The defence expenditure in all heads was around USD 47.22 billion in 2013-14, approximately 1.79% of GDP and 12.23% of total government expenditures in the financial year. Whereas the expenditure has climbed up to INR 6.21 trillion (USD 75.2 billion) during the current financial year 2024-25. This amount is around 12.9% as compared to the 13.33% of total government expenditure as compared to the FY 2023-24 and just 1.89 percent of the estimated GDP and likely to be in the range of 1.9 to 2% of the GDP in the FY 2025-26.