Budget Expectations: In the last Budget, released in July, the central government allocated Rs 6.22 lakh crore to the defence sector, a tad higher than the allocation in the interim Budget earlier last year. This time around, will there be an increase in the defence allocation?
Budget 2025 Expectations: As India awaits the government’s Union Budget for 2025-26, expectations are soaring for major reforms that will impact various industries and sectors. Will there be a higher allocation for crucial sectors like defence in the upcoming Budget?
The Union Budget 2025-26 is likely to announce an allocation of Rs 6.7 lakh crore for defence, taking its share beyond 2 per cent of the country’s gross domestic product (GDP), sources told Zee Business. If it materialises, such an allocation for the defence space will mark a 7.7 per cent increase from the allocation in the July Budget.
The higher defence allocation may include capital expenditure (capex) of Rs 2 lakh crore, according to the sources.
Capex is the amount of money reserved for buying long-term assets, such as new equipment.
An allocation of Rs 1 lakh crore is likely for operational preparations, excluding the Border Roads Organisation (BRO), they said
Around Rs 1.5 lakh crore is likely to be earmarked for pensions and any remainder may be utilised towards other expenses, they said.
The Ministry of Defence has already decided to observe 2025 as the year of reforms.
As India stepped into the New Year, Defence Minister Rajnath Singh said that the year of reforms will be “a momentous step” in the “modernisation journey of the Armed Forces”.
The year would lay the foundation for unprecedented advancements in defence preparedness, ensuring India’s security and sovereignty amidst challenges of 21st century, he said.
Reforms should focus on new domains such as cyber and space, and emerging technologies like artificial intelligence (AI), machine learning (ML), hypersonics and robotics.
In the July Budget, the government fully exempted custom duties applicable to 25 critical minerals while reducing the basic customs duty on two other, in a bid to support the processing and refining of such minerals, and aid their availability for strategic and important sectors.
Minerals such as lithium, copper and cobalt, and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications and high-tech electronics.
Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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