A recent report sheds light on a concerning trend in Indias defence spending, revealing that the share of central government expenditure allocated to defence has been steadily declining over the past several years. For the fiscal year 2024-25, the government has earmarked ₹6,21,941 crore (approximately USD 74.3 billion) for the Ministry of Defence, which represents a marginal 0.3% decrease compared to the revised estimates for the previous fiscal year, 2023-24. This reduction comes despite an overall projected 9% increase in total central government spending for the same period.

The report highlights that defence spending as a proportion of total government expenditure has been on a downward trajectory. In 2014-15, it accounted for 17.1% of the total budget, increasing slightly to 17.8% in 2016-17. However, by 2024-25, this figure is expected to decline to just 12.9%, down from 13.9% in the previous year. Similarly, the defence budgets share of GDP has decreased to 1.9%, a notable shift for a country that remains one of the largest military spenders globally. Several factors contribute to this decline. A significant portion of the defence budget is consumed by rising pension costs, which are projected at ₹1,41,205 crore for 2024-25, reflecting a 2.17% increase from the previous year. Additionally, the substantial rise in overall central government expenditure has diluted defence spending as a relative share, even if the absolute figures show nominal increases. The governments strategic focus on modernization and self-reliance under initiatives like Atmanirbhar Bharat has also played a role, with efforts to boost domestic production of defence equipment and reduce dependence on imports influencing budget allocations.

While the government has increased the capital outlay for modernization to ₹1,72,000 crore for 2024-25, experts argue that these measures may fall short of addressing India’s long-term security and modernization goals. The declining share of defence spending raises concerns about the country’s ability to maintain robust military capabilities in an increasingly complex and challenging geopolitical landscape, especially given tensions with neighboring countries like China and Pakistan. Although the nominal figures suggest stability or slight growth in the defence budget, the falling proportion relative to total government expenditure underscores the challenges of balancing modernization, pensions, and operational readiness. With evolving security threats and strategic requirements, sustaining a strong and well-equipped military remains a pressing issue, and the declining share of resources dedicated to defence could potentially hinder India’s ability to meet these objectives effectively.

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