Significant Increase in Defence Budget to Bolster India's Security and Defence Capabilities
Significant hikes in the budgets for intelligence agencies will strengthen the "first line of Defence ," making data collection and preemptive strikes more effective.
NewsBharati 07-Feb-2026 19:29:20 PM
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On February 1, 2026, Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Parliament. A substantial provision of ₹7,84,678 crore has been made for Defence. This marks a significant 15.2% increase compared to the ₹6,81,210 crore allocated in the previous fiscal year.
Budget Breakdown: Growth in Capital and Revenue
Defence expenditure is primarily divided into asset creation (Capital Expenditure - Capex) and daily operations and maintenance (Revenue Expenditure).
Capital Expenditure (Capex): This provision has risen from last year's ₹1,80,000 crore (Budget Estimate) to ₹2,19,306 crore (a 27.9% increase). This surge will accelerate the procurement of Rafale aircraft, submarines, and UAVs. Investing in the capital budget enables the development of modern weaponry. Capital expenditure now accounts for 21.8% of the total Defence budget, signaling investment-centric growth.
Revenue Expenditure: ₹5,53,668 crore has been reserved for salaries, training, and maintenance. The 20.2% increase in the revenue budget will help manage high operational costs in border areas near China and Pakistan where active firing often occurs.
Core Defence Budget Overview
| Category | FY 2025–26 (BE) | FY 2026–27 (BE) | Growth (%) |
|---|---|---|---|
| Total Defence Budget | ₹6,81,210 Crore | ₹7,84,678 Crore | +15.2% |
| Capital Expenditure (Capex) | ₹1,80,000 Crore | ₹2,19,306 Crore | +27.9% |
| Revenue Expenditure | ₹4,60,000 Crore (est.) | ₹5,53,668 Crore | +20.2% |
| Defence Pensions | ₹1,69,185 Crore (est.) | ₹1,71,338 Crore | +1.27% |
Reduction in Pension Expenditure
A provision of ₹1,71,338 crore has been made for 27 lakh veterans (24 lakh Army, 2.26 lakh Air Force, 1.5 lakh Navy). This allocation grew by only 1.27% this year, indicating that pension expenses are gradually stabilizing. A major reason for this shift is the recruitment of Agniveer soldiers, who do not fall under the traditional pension scheme.
Strategic Focus: Modernization and Indigenization
Given the border disputes with China and Pakistan, the constant threat of terrorism, and the need for self-reliance under 'Atmanirbhar Bharat', the budget reflects a commitment to military modernization. The year 2026 has been dubbed the "Year of Reform 2.0."
Service-wise Allocation:
- Army: Receives the largest share due to the manpower needs of 1.2 million soldiers.
- Navy: Allocated ₹25,023 crore to address challenges in the Indo-Pacific region.
- Air Force: Received ₹63,733 crore to address the shortage of aircraft squadrons (current: 30, requirement: 42).
- Modernization Initiatives: ₹2.19 lakh crore is earmarked for Rafale-M (Navy), Akashteer Air Defence, and drone technology.
- Boosting Self-Reliance: Customs duty exemptions on aircraft parts and raw materials will benefit private Defence companies like L&T. The goal is to increase production in the Defence corridors of UP and Tamil Nadu.
- Infrastructure: Over ₹10,000 crore allocated to the BRO for roads and bridges along the LAC.
Strategic Allocations & Market Context
| Metric | Detail / Value |
|---|---|
| Share of Total Union Budget | 13–14% |
| Share of National GDP | ~1.9–2.0% |
| Global Rank (Defence Spending) | 4th (USD 93 Billion) |
| Capital Share of Total Defence Budget | 21.8% (Investment-focused) |
| Defence Exports (2025) | ₹23,000 Crore |
| BRO (Border Infrastructure Allocation) | ₹10,000+ Crore |
Efficiency and Economic Context
GDP Share: Defence spending remains stable between 1.9% and 2% of the estimated GDP, accounting for 13–14% of the total ₹50–55 lakh crore Union Budget. India ranks 4th globally with a spend of $93 billion.
Efficient Utilization: The trend of funds "lapsing" or returning unspent has become negligible. In fact, the Revised Estimate (RE) for 2025-26 stood at ₹6,98,000 crore, which was 2.5% higher than the original Budget Estimate (BE), showing that the Ministry is utilizing funds effectively.
Export Growth: In 2025, India exported weapons worth approximately ₹23,000 crore. The nation aims for 100% self-reliance in arms and ammunition within the next five years.
Strengthening Internal Security and Intelligence
The Ministry of Home Affairs (MHA) saw a 9% budget increase, focusing on empowering CAPFs like the ITBP (China border) and BSF (Pakistan border).
Model Villages: Increased funding for 'Model Villages' along the Indo-China border aims to sustain local populations who act as the "eyes and ears" of the Indian Army.
Intelligence: Significant hikes in the budgets for intelligence agencies will strengthen the "first line of Defence," making data collection and preemptive strikes more effective.
The Road Ahead: "Yeh Dil Maange More!"
While the budget is balanced and future-oriented, challenges remain. While India is fully prepared for Conventional Warfare (as seen in 1947, 1962, 1965, or 1971), it must further enhance its capabilities in Multi-domain Warfare.
China engages India in 365-day "hidden" warfare—including Economic Warfare, Cyber Warfare, and Grey-zone Warfare. To counter these hybrid threats and match the Defence scales of China, there is a constant demand for even higher allocations. In the context of national security, the sentiment remains: "Yeh Dil Maange More!"
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BRIG Hemant Mahajan
Passionate writer on National Security related issues, Brig Hemant Mahajan YSM (Retd) is M Sc, M Phil in Defence Studies. He joined IMA Dehradun in July 1973 and passed out as a Commissioned Officer on 15 June 1975. He was commissioned into 7 MARATHA LIGHT INFANTRY. He has served extensively in Counter Insurgency Operations in Insurgency and Terrorist prone areas of Jammu & Kashmir, Punjab and North East and has taken part in all important operations undertaken by the Army since 1975.
Brig Hemant Mahajan served in Jammu & Kashmir, in the deserts of Rajasthan, in Super High Altitude areas of Kargil and Leh, forward areas of Arunachal Pradesh. He was deployed in Punjab in ‘Operation Avert’. He was also involved in maintaining peace post ‘Operation Bluestar’ days in Punjab in the worst affected district of Gurdaspur, Taran Taran and Amritsar.He served in the areas of Darjeeling, Kurseong, Siliguri and Sikkim. He commanded his battalion 7 MARATHA LIGHT INFANTRY in Operation Rakshak in the most difficult areas of Poonch and Rajouri during the times of highest militancy. His unit was responsible for stopping terrorists from Pakistan into Jammu and Kashmir. His unit was awarded Unit Citation, 18 gallantry awards including YSM (gallantry) for the officer.