{"id":1918,"date":"2025-02-16T18:13:17","date_gmt":"2025-02-16T12:43:17","guid":{"rendered":"https:\/\/www.samdesindia.in\/blog\/?p=1918"},"modified":"2025-02-16T18:13:19","modified_gmt":"2025-02-16T12:43:19","slug":"a-deep-dive-into-the-defence-budget-numbers","status":"publish","type":"post","link":"https:\/\/www.samdesindia.in\/blog\/a-deep-dive-into-the-defence-budget-numbers\/","title":{"rendered":"A Deep Dive into the Defence Budget Numbers"},"content":{"rendered":"\n

Ms Shobhana Joshi, Co-Chairperson SAMDeS<\/strong><\/p>\n\n\n\n

The allocation for the financial year\u00a0 2025-26 is Rs. 6,81,210.27 \u00a0crores as against\u00a0 Rs. 6,21,940.85 crore of 2024-25 which is a year-on-year increase of 9.53%. The total allocation is 13.45 % of the Budget Estimates of the Union of India. Of this allocation, Rs 1,80,000 crore\u00a0i.e.<\/em>\u00a026.43% will be spent on Capital outlay on Defence Services. \u00a0Revenue Head \u00a0allocation for the Armed Forces is \u00a0Rs 3,11,732.30 crore which is 45.76% of total allocation. Defence Pension receives a share of Rs 1,60,795 crore\u00a0i.e.<\/em>\u00a023.60% and balance Rs 28,682.97 crore\u00a0i.e.<\/em>\u00a04.21% is for civil organisations under MoD. Grant wise details\u00a0 are tabulated below:\u00a0\u00a0 \u00a0<\/p>\n\n\n\n

\"\"
Tabel 1: Grant Wise Summary<\/figcaption><\/figure>\n\n\n\n

Allocations for Defence Services<\/strong><\/p>\n\n\n\n

\u00a0The allocation for the Defence Services is 8 % more than BE 2024-25. The\u00a0 Revenue Capital breakup for BE and RE\u00a0 2023-24, BE 2024-25 and RE 2024-25\u00a0 and BE 2025-26\u00a0 are given below to bring out the trends (Values in crore).\u00a0 \u00a0<\/p>\n\n\n\n

\"\"
Table 2: Trends in Allocations<\/figcaption><\/figure>\n\n\n\n

Capital Budget<\/strong><\/p>\n\n\n\n

The 3rd<\/sup> \u00a0Report of the Standing Committee on Defence (2024-25) states that re-structuring of \u00a0the capital budget has been done with effect from FY 2024-25 wherein budgetary allocation of the three Services under common minor heads has been clubbed under the newly introduced Sub Major Head 09 i.e. Defence Services. Allocation under other minor heads which are not common to the Services has been kept as it is.<\/p>\n\n\n\n

The allocation for Capital head is Rs. 1,80,000 crores but further analysis of the break up shows that for the Defence Services, the allocation is only Rs 1,61,528.02 crore and also includes allocation for \u00a0Land and Construction Works, ECHS, and NCC. The allocation for Capital Acquisition is 1,42,107.38 crore. While the adequacy of this amount for the \u00a0modernisation \u00a0of the armed forces continues to be debated by analysts, there is\u00a0 also the\u00a0 paradox of unutilized \u00a0\u00a0allocations. A comparison of the BE and RE 2024-25 brings out \u00a0that against a BE\u00a0 2024-25 of Rs. 1,55,475.52 crore the RE\u00a0 2024-25 was Rs. 1,43,778.60 crore, a surrender of Rs. 11.696.92 crore. However, the heads \u00a0\u2018Aircraft & Aero engines\u2019, and \u2018Naval Fleet\u2019 incurred excess over their BE allocation whilst \u2018Other Equipment\u2019, \u2018Land\u2019 \u2018Construction Works\u2019, \u2018Naval Dockyard\u2019, and \u2018Special Projects\u2019 surrendered sizeable portions of their allotted budgets.<\/p>\n\n\n\n

\"\"
Table 3: Allocations of Capital Expenditure<\/figcaption><\/figure>\n\n\n\n

The\u00a0 allocations between capital and other than capital acquisition \u00a0and the slippages at RE stage in 2024-25\u00a0 are \u00a0\u00a0given below.<\/p>\n\n\n\n

\"\"
Table 4: Capital Acqusition details<\/figcaption><\/figure>\n\n\n\n

The surrender of funds due to non-utilisation of the allocated budget  in the \u2018Capital Acquisition\u2019 segment has been to the tune of Rs. 6922.75  crore. It is noted  that  there was  an additional  allocation of funds  at RE stage  in the following heads; <\/p>\n\n\n\n

  • Rs. 6314 crores in  \u2018Aircraft &Aeroengines\u2019,<\/li>
  • Rs. 1805  crore, in \u2018Naval Fleet\u2019  and<\/li>
  • Rs 1112  crore in \u2018Joint Staff\u2019. <\/li><\/ul>\n\n\n\n

         Whereas  in the heads \u2018Heavy & Medium Vehicles\u2019 and \u2018Other Equipment\u2019 there was a surrender of funds amounting  to Rs.16,153 crore. As the head \u2018Other Equipment\u2019  is very generic it is difficult to assess from the budget documents where exactly the slippages have taken place.  <\/p>\n\n\n\n

    In the \u2018Other than Acquisition\u2019 segment there has been  surrender of funds of  Rs. 4777.17 crore as follows:-<\/p>\n\n\n\n

    • \u2018Land\u2019 amounting to Rs.1486.41 crore,<\/li>
    • \u2018Construction Works\u2019 Rs. 1455.13 crore,<\/li>
    • \u2018Naval Dockyard\u2019 Rs. 1412 crore,<\/li>
    • \u2018Special Projects\u2019 423.63 crore. \u00a0<\/li><\/ul>\n\n\n\n

      Revenue Budget   <\/strong><\/p>\n\n\n\n

      Sustenance of Weapons and Equipment<\/strong><\/p>\n\n\n\n

         Rs 3,11,732.30 crore has been allocated for Defence Services (Revenue) which is 10.24% higher than BE 2024-25.  Out of this, Rs 1,14,415.50 crore has been allocated on account of non-salary expenditure  of ration, fuel, ordnance stores and maintenance\/repair  of equipment etc. Rs 1,97,317.30 crore has been allocated for  the salary expenditure  of the three services.<\/p>\n\n\n\n

      The Revenue budget does not show separate allocations for maintenance and repair and revenue stores including ammunition, except Navy which has a separate head for repair and refits. It is pertinent to note that the Actuals for 2023-24 were\u00a0 Rs. 66,473.61 crore. The \u00a0RE 2024-25 is Rs. 63,383.87 crore and BE 2025-26 is Rs. 67,628.09 crore. \u00a0Therefore, effectively the increase is marginal. \u00a0\u00a0<\/p>\n\n\n\n

      \"\"
      Table 5: Revenue Allocations<\/figcaption><\/figure>\n\n\n\n

      Focus on Indigenous Capacity<\/strong><\/p>\n\n\n\n

          The budget continues with the focus on building up indigenous production of weapons and systems and strengthen the domestic industries. Accordingly, a substantial share of the modernisation budget is being earmarked for the capital procurement from domestic industries. In order to encourage the private sector for manufacturing and technological development in the defence sector, a notable percentage of domestic share is further earmarked for acquisition from domestic private industries. As per PIB press release in  2025-26, Rs 1,11,544.83 crore i.e.<\/em> 75% of modernisation budget has been earmarked for procurement through domestic sources and 25% of domestic share i.e.<\/em> Rs 27,886.21 crore has been provisioned for procurement through domestic private industries.<\/p>\n\n\n\n

      Reforms  in Budget structure   <\/strong><\/p>\n\n\n\n

      The Ministry of Defence  has taken a decision to observe 2025-26 as \u2018Year of Reforms\u2019 and is aimed to  simplify  the Defence Procurement Procedure to ensure optimum utilisation of the allocation. This is a welcome move. However, the reforms should also cover the budget structure with a view to reflect the major trends  in warfare.<\/p>\n\n\n\n

      Modern  warfare in the aftermath of the Russia-Ukraine conflict, is increasingly defined by real time situational awareness and battlefield transparency. Unmanned systems and AI autonomy have redefined force structures to balance  legacy and new age  weapons. Man-unmanned synergy is the new doctrine. Some countries are planning for 30% unmanned forces. The budget documents which are available in the public domain, however focus on capability building of conventional weapon systems. Allocation of funds for the new systems should be shown under separate heads to better assess the trend of expenditure for the new age systems.   <\/p>\n\n\n\n

            Another area which needs reform, is to replace the stores head in the Revenue Budget with separate heads. The allocations for the maintenance of weapon systems and repairs must be a separate head and ammunition and ordnance stores required for operations must be different head. This will provide   a better understanding of the trends for sustenance of the weapon platforms.<\/p>\n\n\n\n

         Joint Staff is still a part of the Navy Budget. It is time that this ad hoc arrangement is changed to have a separate budget head especially now that there is CDS in place.     <\/p>\n\n\n\n

      <\/p>\n","protected":false},"excerpt":{"rendered":"

      Ms Shobhana Joshi, Co-Chairperson SAMDeS The allocation for the financial year  2025-26 is Rs. 6,81,210.27  crores as against  Rs. 6,21,940.85 […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[46,1],"tags":[187,182,836,588,587,643,289,239,835,837],"yoast_head":"\nA Deep Dive into the Defence Budget Numbers | SAMDES INDIA'S BLOG<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.samdesindia.in\/blog\/a-deep-dive-into-the-defence-budget-numbers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A Deep Dive into the Defence Budget Numbers | SAMDES INDIA'S BLOG\" \/>\n<meta property=\"og:description\" content=\"Ms Shobhana Joshi, 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