Defence Budget 2025: Detailed Analysis

February 4, 2025

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The Union Budget for 2025-26 has set aside Rs 6,81,210.27 crore for the Ministry of Defence (MoD), which is a 9.53% increase compared to last year’s budget. This amount represents 13.45% of the total Union Budget, marking it as the largest allocation among all ministries. The budget supports Prime Minister Narendra Modi’s vision of ‘Viksit Bharat @ 2047’ and emphasizes the need for a technologically advanced and self-reliant Armed Forces.

Analysis of Defence Budget 2025

Budget Allocation Breakdown

Capital Outlay: Rs 1,80,000 crore (26.43%) for modernisation and infrastructure.
Revenue Expenditure: Rs 3,11,732.30 crore (45.76%) for pay, allowances, and operational needs.
Defence Pension: Rs 1,60,795 crore (23.60%) for 34 lakh pensioners.
Civil Organisations: Rs 28,682.97 crore (4.21%).

Capital Outlay and Modernisation

Rs 1,80,000 crore allocated, 4.65% higher than last year.
Rs 1,48,722.80 crore for acquisitions like aircraft, submarines, and AI-driven technology.
75% of modernisation budget (Rs 1,11,544.83 crore) for domestic procurement.
Major purchases include drones, deck-based aircraft, and cyber warfare investments.

Operational and Sustenance Budget

Rs 3,11,732.30 crore for revenue expenditure, 10.24% higher than 2024-25.
Rs 1,97,317.30 crore allocated for salaries.
24.25% increase in operational funds to strengthen border deployments and military readiness.

Boost for DRDO and Defence R&D

Rs 26,816.82 crore allocated to DRDO, up 12.41%.
Rs 14,923.82 crore for R&D, focusing on AI, robotics, and space tech.

Encouraging Startups and Innovation

Rs 449.62 crore for iDEX & ADITI schemes, tripling in two years.
Focus on private sector partnerships and defence startups.

Ex-Servicemen Welfare and Defence Pension

Rs 1,61,000 crore allocated for pensions, 13.87% higher.
Rs 8,317 crore for Ex-Servicemen Contributory Health Scheme (ECHS), up 19.38%.

Indian Coast Guard (ICG) Enhancements