Editorial: Meagre funds for defence modernisation

The budget has grown by 9.52% over last year, barely enough to account for rising cost of pensions and revenue expenditure

The hopes of a big push for defence modernisation and research in the Union Budget 2025-26 were belied as Finance Minister Nirmala Sitharaman made inadequate allocations for key areas that have a bearing on the country’s defence preparedness. The budget for defence has grown by 9.52% over last year, barely enough to account for the rising cost of pensions and revenue expenditure. The Rs 6.81 lakh crore allocation for the sector constitutes a mere 1.9% of the projected gross domestic product (GDP) for 2024-25. Notably, the biggest increase in defence allocation is in the pension category, accounting for 23.60% of the total allocation and stands at Rs 1.60 lakh crore. In terms of capital budget allocated for modernisation, including the purchase of new fighters, drones, artillery guns, tanks, infantry fighting vehicles and helicopters, the numbers stand at a mere increase of Rs 8,000 crore — from Rs 1.72 lakh crore in the current fiscal to Rs 1.80 lakh crore in the new budget. Ironically, the armed forces have failed to utilise the capital budget allocated to them and had to return Rs 13,000 crore. Overall, the defence allocation falls below the level needed to maintain the high combat capability of the armed forces. At the global level, the military spending of the United States in 2024 was $916 billion and China ranked second at $296 billion, while India’s allocation is at $78.7 billion. Over the years, India’s defence modernisation has been moving at a slow pace.

The lack of budgetary provisions has forced the armed forces to give priority to filling the critical gaps first. Most of the weapon systems and platforms are ageing as some of them were acquired way back in the 1970s. Despite the growing threat perception on two fronts — Pakistan and China — the spending on defence research has remained stagnant in India for several years, accounting for less than one per cent of the GDP. This is a matter of serious concern that needs to engage the attention of the policymakers. India is far behind countries like China and the United States in this aspect. The Parliamentary Standing Committee on Defence had flagged the issue in the past and recommended adequate funding so that strategic projects are taken up with full vigour. This is particularly important in view of the current international scenario, where threat perception is increasing due to ongoing conflicts the world over. The budgetary allocations for the Defence Research and Development Organisation (DRDO), the apex defence research body in the country, have been far from satisfactory. Over the years, the share of DRDO has been around 6 per cent of the defence budget, hardly enough to deliver on strategically important projects. It is high time the Ministry of Defence fast-tracks the establishment of the non-lapsable defence modernisation fund that could be used exclusively for the procurement of critical defence assets in crunch situations.

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