'Budget reinforces commitment to strengthen nation's defence systems,' says Rajnath Singh

Defence Minister Rajnath Singh welcomed the Union Budget 2026–27, stating that it will further strengthen India’s defence capabilities.

Defence Minister Rajnath Singh on Sunday welcomed the Union Budget 2026–27, stating that it will further strengthen India’s defence capabilities.

Expressing gratitude to Prime Minister Narendra Modi, Singh highlighted the record allocation of ₹7.85 lakh crore to the defence sector.

“I believe that this budget fulfils the sentiments and expectations of the people. Furthermore, this budget provides a strong foundation for the Prime Minister’s vision of ‘Atmanirbhar Bharat’ (Self-Reliant India) and ‘Viksit Bharat 2047’ (Developed India by 2047). It includes appropriate provisions for the upliftment of all sections of society. In this budget, an allocation of ₹7.85 lakh crore has been made for the defence sector. I express my sincere gratitude to Prime Minister Modi for this as well,” the Raksha Mantri said.

The Defence Minister said that the Budget reinforces the commitment to strengthening the nation’s defence systems.

“Coming after the historic success of ‘Operation Sindoor’, this budget has reinforced our commitment to further strengthening the nation’s defence system. This allocation represents an increase of more than 15 percent over the previous year. This means that once again, the Ministry of Defence has received the largest share of the central budget. This year, ₹2.19 lakh crore has been allocated for the overall capital expenditure of our armed forces. The most significant aspect of this budget is the modernisation of our three wings of the armed forces. For this purpose, ₹1.85 lakh crore has been provisioned this year, which is approximately 24 percent higher than the previous financial year. As a result of this increase, our military capabilities will be further empowered,” Rajnath Singh said.

“The welfare of ex-servicemen and their families has also been given a prominent place in this budget. Under the Ex-Servicemen Contributory Health Scheme (ECHS), a provision of ₹12,100 crore has been made, which is an increase of about 45 percent compared to the current year. In summary, this budget strengthens the balance between security, development, and self-reliance,” the Minister added.

Defence Secretary Rajesh Kumar Singh highlighted that the capital expenditure outlay has gone up by 21 percent.

“I am happy with the budgetary allocations announced by the Finance Minister as part of this year’s budget. The overall budget for the Ministry of Defence is going to be ₹7.85 lakh crore, which is a 15 percent increase over the allocation for last year. More importantly, in the area of CAPEX, the overall capital expenditure outlay has gone up by 21 percent to about ₹2.9 lakh crore. Most critically, when it comes to modernisation, the budget is actually being spent on modern equipment and other technological upgrades required for boosting the capabilities of our armed forces,” Rajesh Kumar Singh said.

In the Union Budget, Defence Services have received an unprecedented allocation amounting to ₹7.85 lakh crore for the financial year (FY) 2026–27. This allocation stands at 2 percent of the estimated GDP for the next financial year and shows a significant increase of 15.19 percent over the Budgetary Estimates (BE) of FY 2025–26. The total defence budget accounts for 14.67 percent of the Central Government expenditure and is the highest among all ministries.

In addition to the modernisation of the Armed Forces and financing their regular requirements, the significantly enhanced allocation will also cater to the financial needs arising from emergency procurement of arms and ammunition made subsequent to Operation Sindoor, under both capital and revenue categories. A large share of the defence budget, to the tune of ₹2.19 lakh crore, has been allotted for capital expenditure, compared to ₹1.80 lakh crore allotted as BE for FY 2025–26. Through this enhanced provision, the Government has reaffirmed its resolve to transform the Armed Forces and their capabilities to the world’s highest standards, with a strategic shift towards the goal of Atmanirbhar Bharat.

Out of the total allocation made to the Ministry of Defence (MoD), 27.95 percent is for capital expenditure, 20.17 percent for revenue expenditure on sustenance and operational preparedness, 26.40 percent for revenue expenditure on pay and allowances, 21.84 percent for defence pensions, and 3.64 percent for civil organisations.

For FY 2026–27, the budgetary allocation under the capital head to the Defence Forces stands at ₹2,19,306.47 crore, which is 21.84 percent higher than the Budget Estimates of FY 2025–26. Out of this, ₹1.85 lakh crore is earmarked for capital acquisition, which is approximately 24 percent higher than the capital acquisition budget for FY 2025–26. In the current geopolitical scenario, a quantum jump in the modernisation budget is a strategic imperative. During FY 2025–26, up to the third quarter, i.e., till December 2025, the MoD has concluded contracts worth ₹2.10 lakh crore and has so far given Acceptance of Necessity approval for more than ₹3.50 lakh crore. The upcoming projects under capital acquisition will equip the Armed Forces with next-generation fighter aircraft, smart and lethal weapons, ships and submarines, unmanned aerial vehicles, drones, specialist vehicles, and more.

Interruptions in global supply chains and the prioritisation of domestic requirements over foreign sellers have re-emphasised the need for import substitution and indigenisation, not only for sustenance but also for future modernisation. In line with this, the MoD’s policy to earmark funds to boost domestic industries through budgetary measures has been further strengthened by earmarking ₹1.39 lakh crore, or 75 percent of the capital acquisition budget, for procurement through domestic industries during FY 2026–27. This reassures domestic players about their investments and their growing role in capability development of the Armed Forces. Enhanced allocation for capital acquisition, especially for domestic industries, will have a long-term positive impact on the national economy and lead to the development of many ancillary industries, creating job opportunities across the country.

The defence budget has made a provision of ₹3,65,478.98 crore for spending under revenue heads, which is 17.24 percent higher than the allocation for BE 2025–26. Out of this, ₹1,58,296.98 crore has been allocated for operations and sustenance-related expenditure, with the remaining amount for salaries and allowances. This allocation will facilitate procurement of operationally important stores and spare parts and ensure maintenance of vital platforms, in addition to meeting day-to-day requirements.

The Government has reiterated its commitment to providing better infrastructure in border areas through higher allocation to the Border Roads Organisation (BRO). Accordingly, the budgetary allocation to the BRO under capital for BE 2026–27 has been enhanced to ₹7,394 crore from ₹7,146.50 crore for FY 2025–26. This allocation will cater to strategically significant projects such as tunnels, bridges, and airfields, and will promote regional development and tourism while providing last-mile connectivity in border areas.

The Government has also reaffirmed its commitment to providing better healthcare facilities to veterans and their dependents through enhanced allocation to the Ex-Servicemen Contributory Health Scheme (ECHS). In the annual budget for FY 2026–27, an amount of ₹12,100 crore has been allotted to ECHS, which is 45.49 percent higher than the current year’s allocation at the BE stage. This allocation will fund medical treatment-related expenditure of veterans. The allocation to ECHS has increased by more than 300 percent over the last five years compared to the BE allocation for FY 2021–22.

The budgetary allocation to the Defence Research and Development Organisation (DRDO) has been increased to ₹29,100.25 crore in FY 2026–27 from ₹26,816.82 crore in FY 2025–26. Out of this, a major share of ₹17,250.25 crore has been allocated for capital expenditure.

The total budgetary allocation for defence pensions stands at ₹1,71,338.22 crore, which is 6.56 percent higher than the allocation made during FY 2025–26 at the BE stage. This amount will be spent on the disbursement of monthly pensions to more than 34 lakh pensioners through SPARSH and other pension disbursing authorities.