Girish Linganna
India has allocated Rs 6.81 lakh crore (approximately US$82.6 billion) for defence in the financial year (FY) 2025-26, marking a 9.53 per cent increase from the previous year’s Budget of Rs 6.22 lakh crore. This increase highlights the country’s focus on modernizing the military and strengthening national security.
Defence spending is divided into capital expenditure and revenue expenditure. Capital expenditure, set at Rs 1.8 lakh crore (US$21.8 billion), is allocated for acquiring such advanced military assets as fighter jets, warships and missile systems. The remaining amount falls under revenue expenditure, covering salaries, pensions, maintenance and operational costs for the armed forces.
The total revenue expenditure for 2025-’26 is Rs 4.88 lakh crore (approximately US$58.8 billion), which includes: Salaries & Allowances: Rs 2.77 lakh crore (approximately US$33.3 billion) to ensure financial security for military personnel; Pensions: Rs 1.6 lakh crore (approximately US$19.2 billion) dedicated to supporting retired defence personnel; Maintenance & Operational Costs: Rs 1.51 lakh crore (approximately US$18.3 billion) for maintaining military assets, fuel, repairs and logistics; and Research & Development: Rs 10,000 crore (approximately US$1.2 billion) to fund technological advancements in defence.
With a 4.65 per cent increase in capital expenditure compared to that in the previous year, the Budget supports the procurement of new military technology. This includes fighter jets, helicopters, warships, submarines, tanks, drones and missile systems to enhance India’s defence capabilities.
The government continues its push for self-reliance in defence production, ensuring that Rs 1.35 lakh crore (US$16.3 billion)-or 75 per cent of the capital acquisition budget-is allocated for domestic procurement. This move strengthens India’s defence industry, reduces dependence on foreign imports, creates jobs and boosts technological advancements.
A large share of the Budget is allocated to day-to-day military expenses: Salaries and pensions ensure financial stability for both serving and retired personnel, Maintenance funds keep military equipment in peak condition through fuel supply, repairs and spare parts, R&D investments drive innovation in modern defence technologies and Administrative and training expenses ensure smooth operations within the armed forces.
For maintaining technological superiority, a significant portion of the Budget is dedicated to research and development (R&D). This supports advancements in artificial intelligence (AI), cyber security, advanced materials and next-generation weaponry, ensuring that the armed forces remain equipped with cutting-edge technology.
Strengthening Border Security: Border protection remains a key priority. Funds are allocated for the construction of roads, bridges, surveillance systems and military bases in strategically important regions. Improved border infrastructure ensures better mobility for troops and enhances national defence capabilities.
The Budget reflects a commitment to the country’s retired defence personnel, with pensions, healthcare and welfare programmes being the key components. Ensuring post-retirement benefits for military veterans is a crucial aspect of defence spending.
Despite the increase in the Budget, certain areas require further attention: Simplifying defence procurement to speed up the acquisition of critical assets, Encouraging private sector participation with better incentives for investment in defence manufacturing, Enhancing cyber security measures to protect military infrastructure from digital threats, Developing space-based defence capabilities to strengthen surveillance and communication and Promoting better coordination among the army, navy and air force for integrated defence strategies.
India has allocated 1.91 per cent of its GDP to defence for FY 2025-26, maintaining the same percentage as in the previous year. In comparison, the US allocated 3.4 per cent of its GDP to defence in 2023, while China dedicated 1.7 per cent in the same period. Russia, on the other hand, has planned 6.3 per cent of its GDP for defence spending in 2025.
The higher Budget allocation reflects a clear commitment to modernizing the armed forces, strengthening self-reliance and supporting veterans. However, achieving long-term security goals will require efficient execution, better coordination and continuous investment in advanced defence technologies. While this Budget provides a solid foundation, effective implementation and monitoring will be essential to ensuring a stronger, more capable military. (IPA)