A modest increase in the annual defence budget allocation, made by Finance Minister Nirmala Sitharaman in the Budget 2023-24, has come as a big disappointment. This comes at a time when India is facing an increasingly belligerent China while Pakistan continues to remain hostile towards India. The overall allocation for defence stood at Rs 5.94 lakh crore, a hike of 13% over last year. The capital outlay pertaining to modernisation and infrastructure development has been pegged at Rs 1,62,000 crore, which is only a marginal rise of 6.7% over the previous year. Since most of the expenditure on weapons and spare parts imports is done in foreign currency, this modest rise in budgetary provisions is neutralized by the recent sharp devaluation of Indian rupee against the US dollar. The Navy, in particular, is bound to be affected, as it has some major platforms in the pipeline.
The procurement of Rafale-M jets for the aircraft carrier, INS Vikrant, and Project-75I for submarine acquisition will almost certainly be put on hold this year. The Air Force, too, will have to delay plans for acquiring more fighter planes and upgrading existing Sukhoi jets. High pension budget is one of the key reasons for the reduced allocations to other defence-related requirements. The pension outlay has been increased this year to Rs 1.38 lakh crore, up from Rs 1.19 lakh crore last year, owing mainly to the announcement of the implementation of “one-rank-one-pension.” The funding for research and development is another area of concern. The new budget’s allocation for the Defence Research and Development Organisation (DRDO) is Rs 23,264 crore, a mere increase of 9% from the previous year’s budget. The marginal increases in R&D spending will only lead to protracted troubles in cutting edge technology development.