Examining India’s Interim Defence Budget 2024-‘25

Introduction On 1 February, Finance Minister Nirmala Sitharaman presented the interim budget for FY2024-‘25. [1] Of the total allocations of INR47,65,768 crore (approx. US$574 billion [a] ), she earmarked INR6,21,541 crore (US$74.8 billion) to the Ministry of Defence (MoD). Representing an increase of 4.7 percent over the previous allocations, [2] the MoD’s interim budget—which amounts to 13 percent of the Central Government Expenditure (CGE)—constitutes the highest allocation among all the ministries. To be sure, the interim allocations of the MoD, like those made by the finance minister for other ministries and departments, may still undergo a change in the full budget of the ensuing financial year—scheduled to be presented in July 2024 after the general elections. Nonetheless, it provides an overview of the general direction of the spending priorities for the defence establishment. This brief examines the MoD’s latest allocations. It outlines an overview of the MoD’s overall expenditures over the last several years; and examines the drivers of growth in the latest allocations and the impact on military modernisation and Atmanirbharata (self-reliance) in defence. It also discusses the nuances of gross domestic product (GDP)-to-defence ratio in view of current debates on appropriate national defence spendings.