Revenue Expenditure

Overview:

In order to accomplish India’s new established goal, ‘Atmanirbhar Bharat,’ the country’s move toward an enduring indigenous defence manufacturing industry and to bolster a strong upholding for the new system would require a stimulus of an increased revenue expenditure. The fraction of government spending that does not result in the production of assets is known as revenue expenditure, such expenditures are incurred to meet the operating requirements of the government. Revenue expenditures include salary, wages, pensions, subsidies, and interest.

Budget Overview

The defence ministry received the greatest allocation from the government, accounting for approx 15 percent of overall budget spending.
The government has boosted defence spending for the fiscal year 2022-23 (FY23) by less than approx 5% over the Revised Estimates for FY22 and by more than 10% above budget estimates 2021-22 due to continued military pressure on the Army from repeated Chinese army incursions on the Ladakh border.
The Army has obtained most of the revenue and pension budget. The Army received approx 82 percent of the entire amount allotted for revenue capital and just approx 18 percent for capital expenditure.

Expenditure trend in India:

The defence budget has been dwindling in recent years, causing most procurements to be pushed back farther and further. To make up for shortages in ammunition inventories, the army was forced to spend revenue funds. At a time when the situation on the border is witnessing an unease, the government is focused on making up for previous financing mistakes. India’s total defence budget has increased at a rate of 9% per year over the last 10 years. The administration aims to increase defence spending in view of rising tensions with bordering nations such as Pakistan and China. On the contrary, the percentage of GDP committed to defence revenue expenditure has been soaring. The proportion of the defence budget spent on revenue expenditures has moreover increased gradually during the last ten years. Whilst, most of the revenue and pension budget has been collected by the Army, due it’s humongous size. The navy was allocated Rs 22,935 crores and the airforce was allocated Rs 29,963 crore for revenue expenditure. In comparison to the budget estimates, to the revised estimates – the Army returned about Rs 11,100 crores in 2021-22, while the Navy received an increased allocation of Rs 12,767.99 crore.

For budgetary funds, India will always have conflicting priorities. The size of the pie is predetermined, and the finance minister is responsible for managing everything within it. National defence and development are intricately linked. The other cannot exist without the first. As a result, determining where more resources are required will be tough.

Scandiya’s Role:

Our job is to make sure that your budget and strategic sourcing are on the same page and that they’re working together on a specific framework to get to the desired outcome. We also make sure that the correct Indicators and dashboards are in place. As a result, you can quickly monitor the programme at a high level and dive down to examine action items as needed. We aid your needs with our experience in handling the sourcing and procurement of a wide variety of defence equipment and offer the assistance needed to accelerate the market’s growth.

Our suppliers are crucial to our capacity to provide the high-quality products and services that our consumers want. To ensure prompt delivery, we worked with the best-in-class and most dedicated teams.
Our in-depth evaluations of government spending and appraisals of important changes in the organisation and operation of defence procurement agencies are well-known.

The effectiveness of the interfaces between the armed forces client, the delivery agency, and the industry entrusted with creating and delivering capabilities is a top priority in our work.

Overview:

Budget Overview

Expenditure trend in India:

Scandiya’s Role:

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