The budget has allocated ₹1.72 lakh crore for capital acquisition by the defence ministry, the biggest chunk of which will go to the domestic industry.In all, it has set aside ₹6.22 lakh crore for the ministry, a tad higher than the allocation made in the interim budget five months ago.
A significant portion of this allocation will go to pensions and salaries.
The ministry will spend the capital acquisition outlay on acquiring new weapon systems for the armed forces, including fighter aircraft, ships, submarines, drones and specialist vehicles.
The planned modernisation of Su 30MKI fighter fleet along with additional procurement of aircraft, acquisition of engines for the existing MiG-29 fleet and purchase of transport aircraft C-295 and LCA Mk1A fighter will be funded out of the budget.Major deals expected to be signed this year include a contract to acquire three additional submarines from Mazagaon Dockyards Ltd, purchase of 26 Rafale Marines from France and long-range drones from the US. In a post on X, Rajnath Singh said, “As far as the allocation to the Ministry of Defence is concerned, I thank the finance minister for giving the highest allocation to the tune of ₹6,21,940.85 crore… The capital outlay of ₹1,72,000 crore will further strengthen the capabilities of armed forces.””This will have a multiplier effect on GDP, employment generation and capital formation, thus providing a stimulus to the economy,” one of the officials said.
Allocations for flagship schemes have also been hiked significantly. For the Agnipath scheme, the allocation has been hiked to ₹5,979 crore from the budgeted estimate of ₹4,266 crore in the last financial year.
The government has also made an additional allocation of ₹400 crore for innovation in defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme.
Under this scheme, the ministry grants up to 50% of the product development budget with a limit of ₹25 crore per applicant for specific projects.
A special focus has been put on border infrastructure development, with Border Roads Organisation (BRO) getting a 30% boost in its budgetary allocation. Projects such as development of Nyoma airfield in Ladakh, Shinku La tunnel in Himachal Pradesh and Nechiphu tunnel in Arunachal Pradesh will be funded out of this allocation.
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