Budget 2023: Here's How Much Govt Has Allocated To Defence Sector In Last Five Years

India’s Defence Budget includes an allocation for the three services: Army, Navy and Air Force. It also includes an allocation for the ordnance factories, research and development, and capital outlay

India has one of the world's largest military forces, with a strength of more than 14.4 lakh active personnel.

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The announcement of the Union Budget for the year 2023-2024 is just a few days away. The Union Finance Minister will table the Union Budget on February 1, 2023. Ahead of the announcement, take a look at how much of the Budget the government has allocated to the Defence sector in the past five years. 

India’s Defence sector is strategically important. India has one of the world's largest military forces, with a strength of more than 14.4 lakh active personnel. India’s Defence Budget includes an allocation for the three defence services: Army, Navy and Air Force. The Defence Budget also includes an allocation for the ordnance factories, research and development, and capital outlay.

Take A Look At The Share Of Funds Allocated To Defence Sector In The Union Budget In Last Five Years:

2018-2019

In the year 2018-19, the Ministry of Defence was allocated Rs 4,04,365 crore (including pensions) for expenditure across the various services, production establishments, and research and development organisations. This comprises 16.6 per cent of the Budget of 2018-19 and 2.2 per cent of India’s estimated GDP.

Out of the total funds allocated to Defence Industry, for Defence Pension, an amount of Rs 1,08,853.30 crore was provided. The revised estimates for 2018-19 was Rs 4,05,194 crore.  

2019-2020

In 2019-20, the Ministry of Defence was allocated Rs 4,31,011 crore (including pensions) for expenditure across various services, production establishments, and research and development organisations. This was about 15.47 per cent of the central government’s Budget for 2019-20 and 2 per cent of India’s estimated GDP. The revised estimates for 2019-20 was Rs. 4,48,820 crore. 

The Budgeted estimates for 2019-20 grew by 6.4 per cent over the revised estimates of 2018-19. The increase was the highest for the capital outlay component. Out of the total funds allocated to Defence Industry, for Defence Pension, an amount of Rs 1,12,079.57 crore was provided.  

2020-2021 

In 2020-21, the Ministry of Defence was allocated Rs 4,71,378 crore.   This includes expenditure for salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance and research and development organisations. Out of the total funds allocated to Defence Industry, for Defence Pension, an amount of Rs 1,33,825 crore. The revised estimates for 2020-21 was Rs 4,84,736 crore.

The expenditure on defence constitutes 15.5 per cent of the central government’s Budget and 2.1 per cent of India’s estimated GDP for 2020-21. The Budgeted Estimates for 2020-21 grew by 5 per cent over the revised estimates of 2019-20. The increase was the highest for defence pensions.

2021-2022

In 2021-22, the Ministry of Defence was allocated Rs 4,78,196 crore.  This includes expenditure on salaries of armed forces and civilians, pensions, modernisation of armed forces, production establishments, maintenance, and research and development organisations. Out of the total funds allocated to Defence Industry, for Defence Pension, an amount of Rs 1,15,850 crore. The revised estimates for 2021-22 was Rs 5,02,884 crore.

In 2021-22, expenditure on salaries and pensions had the largest share of the defence Budget (Rs 2,58,628 crore, constituting 54 per cent of the defence Budget). Capital outlay of Rs 1,28,150 crore, formed 27 per cent of the Defence Budget.

2022-2023

In the year 2022-23, the Ministry of Defence was allocated a total Budget of Rs 5, 25,166 crores, which is 13.31 per cent of the total Budget. This included an amount of Rs 1.19 lakh crore for Defence Pensions. Total allocation under Capital Outlay of Defence Services enhanced to 1.52 lakh crore

In a major announcement during her Budget speech, Nirmala Sitharaman said that To reduce imports and promote self-reliance, the Budget for 2022-23 proposed that 68 per cent of the defence capital procurement Budget will be earmarked for the domestic industry. This increased from 58 per cent in 2021-22.