NEW DELHI: The modernization of India’s military will proceed at a gradual and unpredictable pace, as the defense budget has been modestly increased by 9.5% compared to last year’s budget estimates and a 6.3% rise over the revised figures. The total defense budget has been set at Rs 6.8 lakh crore ($79 billion), which includes a substantial pension allocation of Rs 1.6 lakh crore. This allocation amounts to just 1.9% of the projected GDP for 2025-26, while a minimum of 2.5% is urgently required to effectively address the collaborative threat posed by China and Pakistan.
The capital expenditure dedicated to military modernization is Rs 1.8 lakh crore, reflecting a mere 4.6% increase from the previous fiscal year’s allocation of Rs 1.7 lakh crore. Furthermore, the defense ministry has returned Rs 12,500 crore in unspent funds under this category.
The revenue allocation of Rs 3.1 lakh crore, intended for the routine operational costs, maintenance, and salaries of the over 14-lakh strong armed forces and defense employees, continues to be almost double that of the capital expenditure.
Several significant defense deals are in the pipeline, which will require payments in installments across multiple fiscal years. These include 26 Rafale-Marine fighters (Rs 63,000 crore) and three additional Scorpene submarines (Rs 38,000 crore) from France, alongside indigenous projects like 156 Prachand light combat helicopters (Rs 53,000 crore) and 307 advanced towed artillery gun systems (Rs 8,500 crore).
However, the armed forces are still facing considerable operational deficiencies across various domains, including a shortage of fighters, submarines, and helicopters, as well as advanced air defense missiles, anti-tank guided missiles, and capabilities for night operations.
Defense Minister Rajnath Singh remarked, “The capital outlay of Rs 1.8 lakh crore for our defense forces will enhance their modernization, technological advancement, and capabilities.”
A Ministry of Defence official noted that the defense allocation for 2025-26 constitutes 13.4% of the Union budget, the highest among all ministries. “Of the defense modernization budget, 75%, or Rs 1.1 lakh crore, is allocated for procurement from domestic sources,” he stated.
The budget allocation for the Defence Research and Development Organisation (DRDO) has risen to Rs 26,817 crore from the previous Rs 23,856 crore. “Out of this amount, a significant portion, Rs 14,924 crore, is designated for capital expenditure and to support R&D projects. This investment will foster the development of new technologies, emphasizing fundamental research and collaboration with private entities through a development-cum-production partnership model,” he added.
Additionally, the Border Roads Organization has been allocated Rs 7,146 crore “to advance the nation’s strategic interests in border regions through the construction of tunnels, bridges, and roads,” he concluded.
