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The News Drill > Blog > Indian Economy & Budget > India’s Defence Dilemma: Balancing Welfare and Strategic Self-Reliance
Indian Economy & BudgetpoliticsReport

India’s Defence Dilemma: Balancing Welfare and Strategic Self-Reliance

The News Drill
Last updated: May 27, 2025 3:57 PM
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Introduction

India stands at a pivotal juncture in its defence and socio-economic trajectory. While the nation allocates substantial funds towards social welfare schemes, questions arise about the adequacy of investments in indigenous defence technologies, crucial for strategic autonomy. The recent approval of the Advanced Medium Combat Aircraft (AMCA) programme and the resurgence of interest in the Kaveri jet engine project spotlight this debate.

Contents
IntroductionWelfare Spending vs. Defence AllocationThe Kaveri Engine Project: A Case for Indigenous CapabilityAMCA Programme: India’s Leap into 5th-Generation FightersGlobal Context: India’s Position in Defence SpendingConclusion: Striking the Right BalanceRecommendations
Indigenous Kaveri jet engine—vital for defence self-reliance—receives modest funding(₹90 Cr/year)

Welfare Spending vs. Defence Allocation

In the fiscal year 2024-25, India’s budget allocations are as follows:

  • Women-Centric Schemes: Over ₹3 lakh crore
  • Scheduled Castes (SC) Welfare: ₹1.65 lakh crore (₹46,000 crore targeted)
  • Scheduled Tribes (ST) Welfare: ₹1.25 lakh crore (₹41,000 crore targeted)
  • Minority Affairs: ₹3,183 crore

In contrast, the defence budget for 2024-25 stands at ₹6.21 lakh crore (approximately $75 billion), marking a 4.72% increase from the previous year. However, over two-thirds of this budget is allocated to salaries and pensions, leaving a smaller portion for capital acquisitions and research & development. (Reuters)

The Kaveri Engine Project: A Case for Indigenous Capability

Initiated in the 1980s, the Kaveri jet engine project aimed to reduce India’s dependence on foreign engine technologies. Despite decades of development, the project has faced technical challenges and funding constraints. In recent times, public sentiment has rallied behind the project, with the #FundKaveriEngine campaign trending on social media platforms. (NDTV)

Responding to this, Defence Minister Rajnath Singh announced increased funding to accelerate the Kaveri engine’s development. (IDRW)

India spends:
• ₹3L Cr+ on women-centric schemes
• ₹1.65L Cr for SC welfare (₹46K Cr targeted)
• ₹1.25L Cr for ST welfare (₹41K Cr targeted)
• ₹3,183 Cr for minority affairs
Yet our indigenous Kaveri jet engine—vital for defence self-reliance—receives modest… pic.twitter.com/nAt7jfXNNe

— Parihar HIMANSHU Singh🦅 (@King_himanshu08) May 27, 2025

AMCA Programme: India’s Leap into 5th-Generation Fighters

The Indian government approved the execution model for the Advanced Medium Combat Aircraft (AMCA) programme, marking India’s entry into the elite group of nations developing fifth-generation stealth fighters. DRDO aims to deliver the AMCA by 2035. (Economic Times)

The programme will involve private and public sector collaboration and is aligned with ‘Atmanirbhar Bharat’. (Reuters)

Global Context: India’s Position in Defence Spending

India ranks as the fifth-largest military spender globally, with an expenditure of $86.1 billion in 2024. In comparison, China’s defence budget stands at $314 billion. (Economic Times)

Experts urge that India should spend at least 2.5% of GDP on defence for credible deterrence. (Economic Times)

Conclusion: Striking the Right Balance

India’s commitment to social welfare is commendable. However, evolving threats and geopolitical realities demand a recalibration. Funding indigenous projects like the Kaveri engine and AMCA ensures not just military independence but also technology, economy, and pride.

Recommendations

  1. Reevaluate Budget Allocations: Ensure strategic tech receives adequate focus.
  2. Enhance Public-Private Partnerships: Use Indian industry strength for defence R&D.
  3. Increase Transparency: Track and publicly report progress of key tech projects.
  4. Strategic Planning: Align investments with long-term military and technological goals.
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