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The Indian Air Force (IAF) stated that there won’t be a shortage of capital funds in 2024–2025 due to the military budget’s unification of the demands of three services. It further said that the Services had already received the monies requested for 2024–2025.

The Army, Navy, and Air Force had each had separate capital funding allocations until February 2024.

The government would accept the 10-year Integrated Capability Development Programme when it has been finalised by the Integrated Defence Staff (IDS) headquarters. After receiving input from the service headquarters, this would be prepared. In a written response, the IAF stated that the Chief of Defence Staff would confer with the Service Chiefs before offering more recommendations to the government.

According to the IAF, the government has combined the demands of the three Services into one military budget, giving the MoD the ability to reallocate funds among the Services while maintaining the inter-services priority. This has allowed for greater financial management flexibility.

For 2024–2025, the defence budget is allotted ₹6.2 lakh crore, of which ₹1.72 lakh crore is for capital expenditures related to new purchases. Of the ₹6.2 lakh crore, capital expenditures accounted for 27.67%, revenue expenditures for sustenance and operational readiness for 14.82%, pay and allowances for 30.68%, defence pensions for 22.72%, and civil organisations under the MoD for 4.11%.

Defence procurements are prioritised by the CDS and approved by the Defence Acquisition Board before being submitted to the MoD for approval.

Funds for new purchases and committed liabilities—payments due in a given fiscal year for agreements signed in prior years—are included in the capital component. The Navy and the IAF, in contrast to the Army, are much more technology-intensive and have a substantial portion of committed liabilities, which have occasionally recently exceeded the entire capital allocation. Due to the threat of a “default situation” on contractual obligations, the services were compelled to counter this by deferring payments of committed liabilities to the Defence Public Sector Undertakings (DPSU) in order to pay foreign firms. In recent years, the Navy has received a large increase in funding to make up for the shortage.

The growing discrepancy between defence budget projections and allocations, which has an influence on defence modernization, has already drawn the attention of the Parliamentary Standing Committee on Defence. Then, it had suggested setting up a special fund for committed debt and future purchases.

The MoD had said that the funding will be used to finance the planned modernization of the current Su-30 fleet, as well as the purchase of 12 more aircraft, new engines for MiG-29 planes, C-295 transport aircraft that are now being installed, and missile systems. In addition, in order to advance the ‘Made in India’ strategy, additional funding will be provided for the Light Combat Aircraft (LCA) TEJAS MK–I IOC/FOC configuration to guarantee the use of cutting-edge technology in domestic production. Projects undertaken by the Indian Navy include the purchase of fighter aircraft with decks, submarines,

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