New Delhi: In alignment with Prime Minister Narendra Modi’s vision of ‘Viksit Bharat @ 2047,’ the Union Budget for the Financial Year (FY) 2025-26 has allocated a record Rs 6,81,210.27 crore to the Ministry of Defence (MoD). This allocation represents a 9.53% increase from the previous fiscal year and accounts for 13.45% of the total Union Budget, making it the highest among all ministries.
Capital Outlay and Modernisation Focus
Out of the total allocation, Rs 1,80,000 crore, constituting 26.43% of the defence budget, is earmarked for capital outlay on defence services. This represents a 4.65% increase from the FY 2024-25 Budget Estimate (BE). A substantial Rs 1,48,722.80 crore is dedicated to capital acquisition, focusing on modernisation, while Rs 31,277.20 crore will support research, development, and infrastructure projects.
Notably, Rs 1,11,544.83 crore—or 75% of the modernisation budget—is designated for procurement from domestic sources, with Rs 27,886.21 crore allocated specifically for domestic private industries. This strategic move is set to bolster India’s self-reliance in defence manufacturing and stimulate economic growth through the defence sector.
Revenue Expenditure and Defence Pension
The budget allocates Rs 3,11,732.30 crore for revenue expenditure, marking a 10.24% increase from the previous fiscal year. This includes Rs 1,97,317.30 crore for salaries and allowances, and Rs 1,14,415.50 crore for non-salary expenses such as equipment maintenance and operational readiness.
Defence pensions receive a significant boost with an allocation of Rs 1,60,795 crore, reflecting a 13.87% increase. The government continues its commitment to veterans through the Ex-Servicemen Contributory Health Scheme (ECHS), which sees a 19.38% increase to Rs 8,317 crore.
Enhanced Funding for Defence R&D and Start-Ups
The Defence Research and Development Organisation (DRDO) will receive Rs 26,816.82 crore, a 12.41% rise from FY 2024-25. This includes Rs 14,923.82 crore for capital expenditure to advance projects in emerging technologies such as Artificial Intelligence (AI), robotics, and cyber defence.
The iDEX scheme, designed to foster innovation in defence start-ups, has been allocated Rs 449.62 crore, nearly tripling its budget over two years. This supports initiatives like the Acing Development of Innovative Technologies with iDEX (ADITI) program.
Indian Coast Guard and Border Infrastructure
The Indian Coast Guard (ICG) sees a 26.5% budget hike to Rs 9,676.70 crore, with a remarkable 43% increase in its capital budget to Rs 5,000 crore. This will fund the acquisition of advanced equipment, including helicopters, patrol vessels, and interceptor boats.
Additionally, Rs 7,146.50 crore has been allocated to the Border Roads Organisation (BRO) under the capital head, a 9.74% increase aimed at enhancing border infrastructure and strategic connectivity.
A Budget for Reforms and Strategic Growth
Defence Minister Rajnath Singh hailed the budget as a crucial step towards achieving the goal of a developed India by 2047. He emphasized that FY 2025-26 will be observed as the ‘Year of Reforms,’ focusing on modernising the armed forces and simplifying defence procurement procedures for optimal resource utilisation.
This historic budget underscores the government’s commitment to national security, technological advancement, and economic growth through strategic defence investments.