Union Budget: Defence gets Rs 6.81 lakh crore; 9.53% increase over current fiscal

Rs 1,80,000 crore set aside for armed forces for capital expenditure that includes purchasing weapons, aircraft, warships

New Delhi: India on Saturday set aside Rs 6,81,210 crore as defence outlay for 2025-26 over the current fiscal’s allocation of Rs 6.22 lakh crore amid the military’s push for modernisation in the face of security challenges from China and Pakistan.

Out of the total allocation, Rs 1,80,000 crore has been earmarked to the armed forces for capital expenditure that largely includes purchasing new weapons, aircraft, warships and other military hardware.

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The Defence Ministry said the total defence budget of Rs 6.81 lakh crore is an increase of 9.53 per cent over the outlay made for the current financial year.

On the capital outlay, the ministry said Rs 1,48,722.80 crore is planned to be spent on “modernisation budget” to procure new military hardware and remaining Rs 31,277 crore is for expenditure on research and development and to create infrastructural assets.

It said Rs 1,11,544 crore that is 75 percent of the modernisation budget has been earmarked for procurement through domestic sources. Twenty-five per cent of domestic share that is Rs 27,886 crore has been provisioned for procurement through domestic private industries.

The capital outlay for the armed forces in the next fiscal is 4.65 percent higher than the budgetary estimate Rs 1.72 lakh crore in 2024-25. The revised capital outlay for 2024-25 has been estimated at Rs 1,59,500 crore.

The overall capital outlay has been put at Rs 1,92,387 crore out of which an amount of Rs 12,387 has been kept for defence services.

For the next fiscal, the revenue expenditure that accounts for day-to-day operating costs and salaries has been pegged at Rs Rs 4,88,822 crore that included Rs 1,60,795 crore for pensions.

The allocation for the defence budget is estimated at 1.91 per cent of the projected GDP in 2025-26.

Defence Minister Rajnath Singh welcomed the overall allocation for the defence budget saying Prime Minister Narendra Modi’s vision of making India self-reliant in defence sector has got a big boost.

The capital outlay of 1,80,000 crore for defence forces will further help in the modernisation, technological advancement and capabilities of our defence forces, he said.

This budget will further strengthen the security and ensure the prosperity of the country and take a “big leap” in realising the vision of Viksit Bharat (developed India), he said.

Under capital expenditure, Rs 48,614 crore has been set aside for aircraft and aero engines while Rs 24,390 crore is allocated for the naval fleet. An amount of Rs 63,099 crore has been set aside for other equipment.

A separate allocation of Rs 4,500 crore has been made for naval dockyard projects.