Finance minister Nirmala Sitharaman on Tuesday announced an allocation of ₹6.21 lakh crore for the defence sector for 2024-25, maintaining the same amount announced in the interim budget five months earlier amid growing threats from China on the northern borders, especially in eastern Ladakh.

The total allocation for defence is 4.79 per cent higher than the outlay made in the financial year 2023-24.

A total of ₹1.72 lakh crore has been set aside for the military for capital expenditure that largely includes purchasing new weapons, aircraft, warships and other defence-related hardware.

For 2023-24, the budgetary allocation for capital outlay was ₹1.63 lakh crore while the revised estimates put the amount at ₹1.57 lakh crore.

The revenue expenditure for day-to-day operating costs and salaries has been pegged at ₹2.82 lakh crore while ₹1,41,205 crore has been set aside for defence pensions, which is 2.17 per cent higher than the allocation made in 2023-24.

Defence minister Rajnath Singh thanked Sitharaman for “giving the highest allocation to the tune of ₹6,21,940 crore, which is 12.9 per cent of the total budget of the government for the financial year 2024-25”.

He said the capital outlay of ₹1.72 lakh crore would strengthen the capabilities of the armed forces and hoped that the earmarking of ₹1,05,518 crore for domestic capital procurement would boost “aatmanibharta (self-reliance)” in defence.

A defence ministry official said the armed forces have drawn up an ambitious modernisation plan.

The air force wants several combat planes and helicopters to replace its Soviet-era aircraft. The navy has planned for a dozen submarines to counter the expanding presence of the Chinese in the Indian Ocean. The army, a large part of which is deployed along the India-China and India-Pakistan frontiers, has plans to procure assault rifles, surveillance drones and body armour to bolster its combat prowess.

Indian and Chinese troops have been locked in border standoff at multiple transgression points in eastern Ladakh since May 2020.

The People’s Liberation Army (PLA) is said to have altered the unmarked Line of Actual Control at the transgression points and is estimated to have taken over close to 1,000sqkm of India-claimed territory. Sources said the PLA has been increasing troops and strengthening its positions at the transgression points.