New Delhi [India], February 1: The Union Budget for FY 2025-26 has allocated a significant Rs 6,81,210.27 crore to the Ministry of Defence (MoD), marking a 9.53% increase from the previous financial year. This funding reflects the government’s commitment to Prime Minister Narendra Modi’s vision of building a technologically advanced, self-reliant (Aatmanirbhar) Armed Forces under the ‘Viksit Bharat 2047’ initiative. The allocation accounts for 13.45% of the overall Union Budget, the highest among ministries.
Of this total, Rs 1,80,000 crore (26.43%) is earmarked for Capital Outlay on Defence Services. The Armed Forces’ revenue budget stands at Rs 3,11,732.30 crore (45.76%), while Rs 1,60,795 crore (23.60%) is allocated to Defence Pensions. An additional Rs 28,682.97 crore (4.21%) is allocated to civil organizations within the MoD.
Defence Minister Rajnath Singh expressed gratitude to Finance Minister Nirmala Sitharaman for the budget, which aligns with the government’s goal of national development, particularly benefiting youth, farmers, women, and the middle class.
Capital Outlay for Defence Modernization
The budget focuses on enhancing the operational readiness and modernization of India’s Armed Forces in the face of changing global security dynamics. Rs 1,80,000 crore is allocated to Capital Outlay, a 4.65% increase from the previous year. Out of this, Rs 1,48,722.80 crore is for modernizing the Armed Forces, while Rs 31,277.20 crore will support Research & Development and the creation of infrastructure.
A significant portion of this budget, 75%, or Rs 1,11,544.83 crore, is allocated for capital procurement from domestic sources, fostering self-reliance and encouraging private sector participation. Additionally, 25% of this budget (Rs 27,886.21 crore) will be directed toward private industries for technological development and manufacturing in defence. The allocation will also fund acquisitions such as Long Endurance Remotely Piloted Aircraft and next-generation submarines.
Sustaining Operational Readiness
For operational and sustenance needs, Rs 3,11,732.30 crore is allocated, an increase of 10.24% from FY 2024-25. This includes Rs 1,14,415.50 crore for non-salary expenses, such as procuring ration, fuel, ordnance stores, and maintenance of equipment. The allocation will support the operational needs arising from increased deployment at border areas, longer deployments, and enhanced flying hours.
Enhanced Funding for DRDO and Innovation
The Defence Research and Development Organisation (DRDO) sees an increase in its budget to Rs 26,816.82 crore, marking a 12.41% rise from the previous year. A substantial portion, Rs 14,923.82 crore, will fund capital expenditures and R&D projects, enhancing DRDO’s capabilities to develop advanced defence technologies in collaboration with private industries.
The budget also emphasizes promoting the start-up ecosystem in defence innovation, with Rs 449.62 crore allocated to the iDEX scheme. This allocation is three times higher than previous years and aims to boost indigenous technology development.
Support for Veterans and Defence Pensioners
To further support defence personnel and their families, Rs 8,317 crore is allocated for the Ex-Servicemen Contributory Health Scheme (ECHS), a 19.38% increase from FY 2024-25. Additionally, the Defence Pension allocation is set at Rs 1,60,795 crore, reflecting a 13.87% increase, ensuring timely implementation of One Rank One Pension (OROP) for pensioners.
Boost to Indian Coast Guard and Border Infrastructure
The Indian Coast Guard (ICG) has received a 26.50% increase in funding, with Rs 9,676.70 crore allocated to both Capital and Revenue Heads. This will enhance ICG’s operational readiness and capabilities, including the acquisition of advanced helicopters and patrol vessels.
For improving border infrastructure, Rs 7,146.50 crore is allocated to the Border Roads Organisation (BRO), marking a 9.74% increase from the previous year. This funding will support the construction of tunnels, bridges, and roads in strategic border areas, enhancing national security and socio-economic development.
This budget reaffirms the government’s commitment to the modernization and self-reliance of India’s defence forces while prioritizing national security and the welfare of veterans.