Union budget for the year 2023-24 was presented in the Indian Parliament recently by Finance Minister Nirmala Sitharaman
In the 75th year of India’s Independence, the Indian Economy has been recognised as a ‘bright star’ with the economic growth estimated at seven per cent, the highest among all major economies, in spite of the massive global slowdown caused by COVID-19 and Russia-Ukraine War. This was stated by Finance Minister Sitharaman while presenting the Union Budget 2023-24 in Parliament on February 1, 2023. She emphasised that Indian economy is on the right track, and despite challenging times, heading towards a bright future. The highlights of the Budget are as follows:
DEFENCE BUDGET 2023-2024
According to the Budget papers for 2023-2024, the total size of the Defence Budget 2023-2024 is 5,93,537.64 crore – or 5.94 lakh crores for ease of reference. In 2022-2023, the defence budget allocation was 5.25 lakh crore which figuratively speaking implies an increase of about 12.5 per cent over last year.
A total of 1.62 lakh crore has been set aside for Capital outlay that includes purchasing new military equipment like fighter jets, submarines, warships, missiles and other military hardware. In 2022-23, the budgetary allocation for Capital outlay was 1.52 lakh crore although the revised estimates for 2022-2023 show the actual expenditure as 1.50 lakh crores. The Capital outlay of 1.62 lakh crore this year indicates an increase of 10,000 crores or 6.7 per cent over last year.
According to 2023-24 Budget documents, an allocation of 2,70,120 crore has been made for Revenue Expenditure that includes expenses on payment of salaries and maintenance of establishments. The budgetary allocation of Revenue Expenditure in 2022-23 was 2,39,000 crore, which indicates an increase of 31,129 crore in this year’s budget.
A separate amount of 1,38,205 crore has been allocated for defence pensions, which compared to last year’s allocation of 1.19 lakh crores indicates an increase of 15 per cent. This could be because of payment of one rank, one pension (OROP) which the Supreme Court has directed the government to pay since 2019. Moreover, defence pensions also include pension of civilian-defence employees of the Ministry of Defence (MoD) allocation for which an amount of 22,812 crores is shown.
The outlay for the Ministry of Defence (Civil) has been pegged at 8,774 crore while an amount of 13,837 crore has been set aside under capital outlay. The total Revenue Expenditure including the pension outlay has been estimated at 4,22,162 crore. The Capital Budget for the Border Roads Organisation (BRO) has been pegged at 5,000 crores against 3,500 crores allotted in FY 2022-2023, which is good.
As per the norm, all three Services had made presentations to the MoD earlier and sought more funds, which would have been sent to the Ministry of Finance (MoF). How closely these projections would have been examined despite the continuing India-China standoff remains questionable in absence of a National Security Strategy (NSS) and without a Comprehensive Defence Review. The Army is looking for more drones of all types, light tanks, more firepower and surveillance and monitoring systems. The Navy needs to get INS ‘Vikrant’ operational with its full air complement and more submarines, the P-75(I) included. The IAF needs to get the S-400 systems deployed and add more fighter jets to make up the depleting number of operational squadrons required. In addition, projects like the Tejas MK2 Multirole Fighter Aircraft (MRFA) and the Advanced Medium Combat Aircraft (AMCA) for fifth-generation fighter jets must keep progressing. How much of the above in terms of numbers can be procured from the Capital outlay, in addition to meeting other operational requirements, would depend on share of the individual Service and the priority allotted for procurement.
THRUSTING AIR TRANSPORTATION
The Union Budget allocation for the civil aviation ministry has been more than halved to 3,113.36 crore for the upcoming fiscal year, owing mostly to a significant fall in the amount set aside for Air India Asset Holding Ltd. This includes 3,026.70 crore from revenue and 86.66 crore from capital.
The reduction i.e. more than half, is primarily due to lesser funds set aside for AI Asset Holding Ltd (AIAHL), a governmentcreated special purpose corporation that holds various assets of national carrier Air India. AIAHL has been granted 1,114.49 crore in the current Budget under the minister’s public sector undertakings section. AIAHL was initially given 9,259.91 crore for 2022-23, which was eventually reduced to 7,200 crore.