One of the key aspects of the Budget is the allocation of funds towards the defence sector. Follow full coverage of the 2024 Interim Budget here.

Over the years, the Narendra Modi government has laid emphasis on making India ‘Aatmanirbhar’ or self-reliant in defence. Since 2014, the year Modi took oath as prime minister, the government has introduced several reforms in the defence sector.

Here are the key budget announcements for the defence sector during the budgets in the past 10 years.

Defence Budget in 2023

Last year, the BJP-led NDA government at the Centre hiked the defence budget for 2023/24 by 12.95 per cent – from ₹5.25 lakh crore to ₹5.94 lakh crore.

Union Finance Minister Nirmala Sitharaman said that this was done to allow the military to develop and/or buy advanced weapons systems, including new fighter jets, submarines and tanks.

The armed forces’ modernisation budget also saw a hike – ₹1.52 lakh crore to ₹1.62 lakh crore. A significant portion of this is for acquisition of weapon systems and equipment from domestic manufacturers in line with the government’s ‘Make in India’ programme.

Defence Budget in 2022

In the budget present in 2022, Union Finance Minister Nirmala Sitharaman allocated ₹5,25,166 crore for the Defence secters. It was subsequently reached to ₹5,55,484 crore, constituting 14.08 per cent of the central government’s expenditure.

Sitharaman had said that 68 per cent of the capital procurement budget for the defence sector would be earmarked in 2022-23 for local industry. This was to reduce the country’s dependence on imports of defence equipment and have a more ‘self-reliant’ defence sector under the Aatmanirbhar Bharat initiative.

Defence Budget in 2021

In 2021, the Defence Budget was earmarked at ₹4,78,196 crore with revised expectations reaching ₹5,35,508 crore. This constituted 14.20 per cent of the central government’s expenditure for the year. The government at the time called for a push towards defence modernisation with an 18.75 per cent increase in defence capital outlay.

Defence Budget in 2020

In the fiscal year 2020-21, India’s Defense Budget was initially projected to be ₹4,71,378 crore. However, the actual expenditure surpassed this estimate, reaching ₹5,23,330 crore amid a border row with China that saw India make a raft of emergency purchases and sharpen its focus on building infrastructure in forward areas.

This amount accounted for 14.91% of the central government’s total expenditure. Additionally, the allocation for Defense Pension witnessed a notable increase, reaching ₹1,33,825 crore, representing a rise of ₹40,367.21 crore compared to the preceding year.

Defence Budget in 2019

India’s defence budget during the interim budget of 2019-20 stood at ₹3.18 lakh crore. This included a capital outlay of ₹1,03,394 crore. The interim budget was presented by former finance minister Piyush Goyal.

The actual expenditure surpassed this estimate, reaching ₹5,23,330 crore or 18.20 per cent of the central government’s expenditure that year.

Defence Budget in 2018

In 2018, India allocated ₹2.95 lakh crore for military spending during 2018-19, a modest hike of 7.8% over last year’s budget. The budget included a capital outlay of ₹99,563 crore for buying new weapons and systems. Arun Jaitley, who was the finance minister at the time, had said the NDA government had laid emphasis on modernising and enhancing the military’s operational capabilities.

Defence Budget in 2017

In 2017, India hiked its allocation on defence spending by a marginal 6%. Finance minister Arun Jaitley allotted ₹2.74 lakh crore for defence spending in 2017-18 – including ₹86,488 crore for modernization.

The actual expenses, however, reached ₹4,17,242 crore, constituting 19.48 per cent of the central government’s expenditure.

Defence Budget in 2016

The Narendra Modi-led government in 2016 announced it would spend ₹2.58 lakh crore on defence in 2016-17, a marginal hike of 9.7% over last year’s revised estimates.

The pension component of the budget stood at ₹82,332.66 crore, with the outgo towards implementing the one-rank-one pension scheme contributing to the financial burden. The allocation for military modernisation in the budget stood at ₹87,209.63 crore.

Defence Budget in 2015

India marginally raised its defence spending in 2015 as former finance minister Arun Jaitley had announced an outlay of ₹2,46,727 crore for 2015-16, an increase of 7.7% over the previous year’s budgetary estimates and 10.95% if calculated against revised estimates.

The defence spending included ₹94,588 crore for buying new weapons and equipment, a jump of merely ₹5 lakh over last year’s capital expenditure.

Defence Budget in 2014

In the first budget of the Modi government, the government had put emphasis on attracting foreign investment, as Arun Jaitley proposed raising the FDI cap in defence and insurance sectors to 49% from 26%.

Jaitley also increased the capital outlay of defence by ₹5,000 crore, including ₹1,000 crore for the development of railways in border areas.

The step is in line with Prime Minister Narendra Modi’s thrust on the expansion of the defence industrial base in the country and enhancing self-reliance in the defence sector, apart from venturing into exporting military items.