Global Defense Spending Trends and India's Budgetary Challenges

                Analysis of the Recently Presented Union Budget

                                    Public Discontent and Concerns

Recently, the Union Budget was presented to the country. Most people are not happy with the budget, as they are upset about the increase in taxes on investments. Additionally, many are concerned that our defense budget remains significantly low. A $100 billion defense budget still seems like a distant goal. If you're wondering why this is important, this video will explain how various countries around the world are rapidly increasing their defense expenditures. In our country, while taxes are rising, there has not been a proportional increase in the defense budget. This raises concerns about where the government will source funds for defense in the future.

                                    Budget Allocation and Comparison

The recently presented budget outlines a total government expenditure of ₹820,000 crores. In dollar terms, this translates to an announced expenditure of $585 billion for the upcoming financial year. To put this in perspective, our budget is approximately $600 billion, whereas the USA's budget is $5 trillion and China's budget is $4 trillion. When I mention the budget, I refer to expenditure—how much is being spent. There is a substantial difference. I often wonder what India's first trillion-dollar budget will look like and if we will see it this decade. It will be very interesting to see.

                                     Defense Budget Allocation

Of the ₹820,000 crores, only ₹21,000 crores have been allocated to the Ministry of Defense. This is our total defense budget, and it is important to note that this amount does not include the capital outlay for purchasing arms and ammunition. A significant portion of our defense budget still goes towards maintaining our army, which is necessary and deserved for our soldiers. However, increasing capital outlay is also crucial. I have repeatedly stated that we need a $100 billion defense budget.

                                       Global defense expenditures

When we compare India's defense budget with that of China or the USA, our defense budget is still around $75 billion. In dollar terms, there has been no significant increase. On paper, China's defense budget is reported to be $236 billion, but several US think tanks suggest that the actual amount could be two or three times higher. The USA's defense budget is much higher, reaching $742 billion. While it may be difficult for us to match this, we need to aim for at least $100 billion. You might wonder why this immediate expenditure is necessary. Globally, defense expenditures are increasing at record speeds, with almost every country preparing for potential conflicts.

                                  International Defense Spending Trends

For the first time since the breakup of the USSR, countries in Europe are willing to spend 4 to 5 percent of their GDP on defense. Poland, for example, is doing this, and Turkey has increased its military spending by 150 percent. Despite facing economic crises, the UK is also committing a significant portion of its budget to defense. New Prime Minister Keir Starmer has openly stated that the UK will allocate a higher percentage of its total budget to defense, potentially reaching a $100 billion defense budget. Remember, the UK does not have neighboring threats like China or Pakistan. This preparation is a sign of foresight, recognizing and preparing for future problems.

                             The necessity for a gradual defense budget increase

In India, we tend to delay decisions. Increasing the defense budget along with taxes might not be as painful for the public because defense spending is inevitable. Many of our Air Force fighter jets and warships are outdated, and we need new tanks, as many of our current ones are several decades old. Hypothetically speaking, if a reckless general in Pakistan or an aggressive move by China were to lead to conflict, an immediate increase in defense spending would shock our economy. At that time, a sudden tax increase to prepare for war would be difficult to absorb.

Therefore, I believe we should aim for a gradual increase in defense spending. Reaching $85 billion, for example, and then gradually moving towards $100 billion would be prudent. Delaying this only makes the eventual increase more painful. This topic is very important, and you should be aware of it.

                                Detailed Allocation of the Defense Budget

Regarding allocation, only ₹2,855 crores have been allocated to DRDO, while China's equivalent organization receives tens of billions of dollars. This is disheartening. The Indian Coast Guard's budget remains relatively stable at ₹7,651 crore. The BRO's budget for border infrastructure has been increased to ₹6,500 crores. Distribution-wise, the Army receives the largest share with ₹92,000 crores, the Navy ₹32,000 crores, and the Air Force ₹46,000 crores. These numbers are important, especially from an exam perspective.