In the wake of challenges of modern warfare and to modernise the military to counter rival China, the Union Budget has allocated Rs 6.81 lakh crore to the Defence Ministry, which is 9.5% higher than the allocation last year, if compared to budget estimate. The defence allocation is 13.45% of the Union Budget, which is highest among the ministries. Of the total allocation, Rs 1.8 lakh crore will be for capital expenditure underlining the importance the government accords to modernising the Armed Forces and procuring new weapons. “The Ministry has taken a decision to observe 2025-26 as ‘Year of Reforms’ which will further strengthen the resolve of the Government for modernisation of Armed Forces and is aimed for simplification in the Defence Procurement Procedure to ensure optimum utilisation of the allocation,” a Defence Ministry statement said on Saturday. The total revenue allocation for the Armed Forces stood at Rs 3.11 lakh crore which is 45.76% of the total outlay. Defence pension has received Rs 1.6 lakh crore and Rs 28,683 crore for civil organisations. On capital outlay, which is 4.65% higher than last year allocation, the Defence Ministry said, “In the current geopolitical scenario where the world is witnessing a changing paradigm of modern warfare, Indian Armed Forces need to be equipped with state-of-the-art weapons and have to be transformed into a technologically-advanced combat-ready force.” Of the total capital outlay, Rs 1.48 lakh crore would be spent on modernisation of the Armed Forces while the rest would be spent on research and development. Significantly, 75% of the Rs 1.48 lakh crore modernisation outlay would be spent on domestic procurement in keeping with the Atmanirbhar Bharat policy of the Centre. “This allocation of funds will further facilitate MoD’s plan to venture in new domains such as Cyber & Space and emerging technologies such as Artificial Intelligence (AI), Machine Learning and Robotics etc. Some major acquisitions planned in the next year such as Long Endurance Remotely Piloted Aircraft of High and Medium altitude, stage payment of Deck-based Aircraft, next generation submarines/ships/platforms will be funded out of this allocation,” the MoD said in a statement. The budgetary allocation to Defence Research and Development Organisation (DRDO) has been increased to Rs 26,817 crore in FY 2025-26 from Rs 23,856 crore last year. Of this, a major share of around Rs 15,000 crore has been allocated for capital expenditure and to fund the R&D projects. “This will financially strengthen the DRDO in developing new technologies with special focus on fundamental research and hand-holding of the private parties through Development-cum-Production Partner,” the Defence Ministry said. In order to further improve border infrastructure and facilitate the movement of Armed Forces personnel through tough terrains, Rs 7,146.50 crore has been allocated to Border Roads Organisation (BRO) under capital head, which is 9.74% higher than the budget estimate of 2024-25. This, the Defence Ministry said, “will not only promote the strategic interest of the nation in border areas by constructing tunnels, bridges and roads such as LGG-Damteng-Yangtse in Arunachal Pradesh, Asha-Cheema-Anita in J&K, and Birdhwal-Puggal-Bajju in Rajasthan, but will also boost socio-economic development, provide employment opportunities and encourage tourism.”
