The government announced a 15% rise in the defense sector allocation for the Budget 2026-27 to enhance the armed forces’ modernization and meet their regular needs. This allocation, totaling Rs 7.85 lakh crore, is unprecedented and amounts to 2% of the estimated GDP for the upcoming financial year. It marks a substantial 15.19% increase over the Budgetary Estimates of the previous year.
The defense budget now stands at 14.67% of the Central government expenditure, the highest among all ministries. A significant portion of this budget, Rs 2.19 lakh crore, has been earmarked for capital expenditure, showing a notable increase from the previous year’s budget estimate of Rs 1.80 lakh crore. This move underscores the government’s commitment to elevating the armed forces to global standards and advancing the vision of Aatmanirbhar Bharat.
The Ministry of Defence has allocated funds strategically, with a focus on capital acquisition to equip the armed forces with advanced weaponry and technology. A substantial share of the capital acquisition budget, amounting to Rs 1.39 lakh crore, has been designated for procurement from domestic industries, fostering their growth and enhancing their role in bolstering the armed forces’ capabilities.
The budgetary allocation for the Defence Research and Development Organisation (DRDO) has seen an increase to Rs 29,100.25 crore for FY 2026-27, with a significant portion allocated for capital expenditure. Additionally, the allocation for defense pensions has been raised to Rs 1,71,338.22 crore, ensuring the timely disbursement of pensions to over 34 lakh pensioners.
