'Budget Reinforces Commitment to Strengthen Nation's Defence Systems,' Says Defence Minister Rajnath Singh

New Delhi: 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 per cent 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 per cent 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 per cent 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 the capital expenditure outlay, which has gone up by 21 per cent.

"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 crores, which is a 15% increase over the allocation for last year. More importantly, in the area of CAPEX, the overall capital expenditure outlay has gone up by 21% to about 2.9 lakh crores. And most critically, when it comes to the modernisation, the budget is actually 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 Rs 7.85 lakh crore for the Financial Year (FY) 2026-27. This allocation stands at 2% of the estimated GDP for the next financial year and shows a significant increase of 15.19% over the Budgetary Estimates (BE) of FY 2025-26. The total defence budget is 14.67% of the central government expenditure and is the highest among the ministries.

In addition to the modernisation of the Armed Forces and financing their regular requirements, the significantly enhanced allocation will also cater for the financial requirements that have arisen due to the emergency procurement of arms and ammunition made subsequent to Operation Sindoor under both categories, viz., capital and revenue. A large share of the defence budget, to the tune of Rs 2.19 lakh crore, has been allotted for capital expenditure, vis-à-vis Rs 1.80 lakh crore, which was 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 Aatmanirbhar Bharat.

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

For FY 2026-27, budgetary allocation under the capital head to the Defence Forces stands at Rs 2,19,306.47 lakh crore, which is 21.84% more than the Budget Estimates of FY 2025-26. Out of this, Rs 1.85 lakh crore is earmarked for capital acquisition, which is approximately 24% 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 3rd quarter, i.e., till December 2025, MoD has concluded contracts worth Rs 2.10 lakh crore and has, so far, given Acceptance of Necessity approval for more than Rs 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/submarines, Unmanned Aerial Vehicles, Drones, Specialist Vehicles, etc.

Interruption in global supply chains and prioritisation of domestic requirements over foreign sellers has re-emphasised the need for import substitution and going for indigenisation not only for sustenance but also for future modernisation.

In line with this, MoD's policy to earmark funds to boost domestic industries through budgetary policies has been further strengthened by earmarking Rs 1.39 lakh crore, i.e., 75% of the Capital Acquisition budget, for procurement through domestic industries during the FY 2026-27. Through such earmarking of funds, domestic players have been reassured about their investment and their increasingly greater 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 will lead to the development of many ancillary industries, creating job opportunities in the country.

The defence budget has made a provision of Rs 365,478.98 crore for spending under revenue heads. This allocation is 17.24% higher than the allocation for BE 2025-26. Out of this, Rs 1,58,296.98 crore has been allocated for operation and sustenance-related expenditure and the remainder for salary and allowances. The budgetary provision made in this regard for the upcoming FY will facilitate procurement of operationally important stores, spare parts, etc., and will ensure maintenance of vital platforms in addition to catering for their 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, budgetary allocation to BRO under Capital for BE 2026-27 has been enhanced to Rs 7,394 crore from Rs 7,146.50 crore for FY 2025-26. The said allocation will cater to many strategically significant projects, such as tunnels, bridges, airfields, etc., and will promote regional development and tourism, along with providing last-mile connectivity in the border areas.

The government says it is committed to providing the best healthcare facilities to the 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 Rs 12,100 crore has been allotted to ECHS, which is 45.49% higher than the current year allocation at the BE stage. The said allocation will fund the Medical Treatment Related Expenditure (MTRE) of veterans. The allocation to ECHS has been increased by more than 300% in the last five years vis-à-vis the allocation made at the BE stage for FY 2021-22.

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

Total budgetary allocation on account of defence pensions stands at Rs 171,338.22 crore, which is 6.56% higher than the allocation made during 2025-26 at the BE stage. It will be spent on the disbursement of monthly pensions to more than 34 lakh pensioners through SPARSH and other pension disbursing authorities.

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