The Union Budget 2026–27, presented in the aftermath of the successful Operation Sindoor, has accorded the Ministry of Defence an all-time high allocation of ₹7.85 lakh crore, marking a decisive step towards strengthening India’s national security architecture. The allocation represents a 15.19% increase over the Budgetary Estimates of FY 2025–26 and accounts for 2% of the estimated GDP, underlining defence as a top national priority.
Raksha Mantri Rajnath Singh said the Budget further strengthens the security–development–self-reliance balance, fully aligned with Prime Minister Narendra Modi’s vision of Aatmanirbhar and Viksit Bharat.
Defence Gets Highest Share in Central Expenditure
The total defence allocation constitutes 14.67% of the Central Government’s expenditure, the highest among all ministries. Beyond meeting routine requirements and modernisation needs, the enhanced allocation will also address emergency procurement of arms and ammunition undertaken after Operation Sindoor under both capital and revenue heads.
Capital Expenditure Sees Quantum Leap
A major highlight of the Budget is the sharp rise in capital expenditure, with ₹2.19 lakh crore allocated under the capital head, compared to ₹1.80 lakh crore in FY 2025–26. This marks a 21.84% increase, reflecting the Government’s strategic intent to rapidly modernise the Armed Forces.
Out of this, ₹1.85 lakh crore has been earmarked for capital acquisition, representing a quantum jump of nearly 24% over the previous year. The enhanced allocation will facilitate induction of next-generation fighter aircraft, advanced weapons systems, ships and submarines, UAVs, drones, specialist vehicles, and other cutting-edge platforms.
Strong Thrust on Aatmanirbhar Bharat in Defence
Reinforcing indigenisation, the Government has earmarked ₹1.39 lakh crore, or 75% of the capital acquisition budget, for procurement from domestic defence industries, including private players. This move reassures domestic manufacturers, strengthens supply-chain resilience, and promotes long-term investment in indigenous capability development.
The policy is expected to have a multiplier effect on the national economy, spurring growth of ancillary industries and generating employment across the defence manufacturing ecosystem.
Sustained Focus on Operational Readiness
The Defence Budget provides ₹3.65 lakh crore for revenue expenditure, a 17.24% increase over FY 2025–26. Of this, ₹1.58 lakh crore is dedicated to operations and sustenance, ensuring timely procurement of spares, maintenance of critical platforms, and uninterrupted operational preparedness. The remaining allocation covers pay and allowances, supporting morale and efficiency across the services.
Major Push for Border Infrastructure Development
The Government has reiterated its commitment to strengthening border infrastructure through enhanced funding for the Border Roads Organisation (BRO). Capital allocation to BRO has been increased to ₹7,394 crore in FY 2026–27 from ₹7,146.5 crore in the previous year.
This will support construction of strategic roads, tunnels, bridges, and airfields, improving last-mile connectivity, enhancing military mobility, and promoting regional development and border tourism.
Veteran Welfare: Record Allocation for ECHS
Demonstrating its commitment to ex-servicemen, the Government has allocated ₹12,100 crore to the Ex-Servicemen Contributory Health Scheme (ECHS)—a 45.49% increase over the Budget Estimates of FY 2025–26. The allocation will fund medical treatment expenses for veterans and their dependents.
Notably, ECHS funding has risen by over 300% in the last five years, reflecting sustained focus on veterans’ welfare and healthcare security.
Boost to Defence R&D and Innovation
Allocation to the Defence Research and Development Organisation has been increased to ₹29,100.25 crore from ₹26,816.82 crore in FY 2025–26. Of this, ₹17,250.25 crore is earmarked for capital expenditure, strengthening indigenous R&D, technology development, and innovation in defence systems.
Increase in Defence Pension Allocation
The Budget provides ₹1,71,338.22 crore for Defence Pensions, a 6.56% increase over FY 2025–26. The allocation will support pension disbursement to over 34 lakh pensioners through SPARSH and other authorised channels, ensuring timely and secure benefits.
Leadership Reactions and Vision Ahead
In a post on X, Shri Rajnath Singh thanked Prime Minister Narendra Modi for the historic allocation and congratulated Finance Minister Nirmala Sitharaman for presenting a Budget that seeks to “transform aspiration into achievement” and “potential into performance”. He described it as a “Yuva Shakti–driven Budget”, inspired by the three national Kartavyas, aimed at accelerating growth, promoting manufacturing, and building sustainable infrastructure.
Conclusion: Union Budget
The Defence Union Budget 2026–27 marks a strategic inflection point in India’s security and defence preparedness. With record allocations for capital acquisition, indigenisation, operational readiness, border infrastructure, R&D, and veteran welfare, the Budget powerfully reinforces the Government’s commitment to national security, self-reliance, and inclusive development. It firmly advances Prime Minister Modi’s vision of an Aatmanirbhar and Viksit Bharat, ensuring that India’s Armed Forces remain modern, capable, and future-ready.
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Source: PIB
