Data | Agnipath: With 34 lakh military pensioners, pensions form >50% of defence budget

More than half the defence budget is allocated for pensions every year while less than 5% is allocated for research and development

Air Force helicopters during the re-enactment of the Indian army’s landing in Srinagar in 1947, at the Air Force Station on the outskirts of Srinagar, on October 27, 2021. File | Photo Credit: Nissar Ahmad

One key reason for the Agnipath scheme, which aims to recruit defence personnel in short-term contracts, could be to reduce increasing pension payments in the Army, Navy, and Air Force. More than half the defence budget is allocated for pensions every year while less than 5% is allocated for research and development (R&D). Over 70% of the defence budget is being used for revenue expenditure (operating expenses), while only about 30% is spent on capital expenditure, meant for the modernisation of the forces. The budgeted expenditure for defence pensions in 2022-23 is higher than the Health and Education Ministries’ revenue expenditures and just below those of the Agriculture and Rural Development Ministries. Moreover, defence pensioners form half of all Union government retirees and double the number of ex-railway employees. The number of defence pensioners has increased by around 10 lakh in just the last seven years.

Share of defence budget

The chart shows the defence pension budget and the defence R&D budget as a share of the total defence revenue expenditure across years. At present, less than 5% of the revenue expenditure is allocated to R&D, while more than 50% of it is spent on pensions. Hover over the chart to find the exact figure

Charts appear incomplete? Click to remove AMP mode

Smaller capital expenditure

The chart shows the revenue and capital expenditures as a share of the total defence budget across years. Increasingly, a lower share is being allocated to capital expenditure, which is meant for buying equipment, vehicles, aircraft. etc.

Defence pension versus ministries

The chart shows the budgeted revenue expenditures of various ministries as compared to the spending on defence pensions for FY23BE. The defence pension surpassed the budgeted revenue expenditures of the Education and Health Ministries

Growing in number

The chart compares the number of Union government pensioners across select departments between January 2014 (blue) and March 2021 (red).

Source: India Budget, Seventh Pay Commission report, Lok Sabha