Defence Spending Hiked, Focus on Modernisation

A significant portion of the modernisation outlay in defence will be spent on buying weapons, systems and equipment

- Rahul Singh

NEW DELHI: India on Saturday set aside more than ₹6.81 lakh crore for defence spending in the Union Budget for 2025-26, including ₹1.8 lakh crore for the modernisation of the military at a time when its shopping list encompasses fighter jets, helicopters, warships, submarines, tanks, artillery guns, drones, and rockets and missiles.

A significant portion of the modernisation outlay will be spent on buying weapons, systems and equipment from domestic suppliers to achieve the self-reliance goal, a top priority for the government.

The allocation is 9.5% higher than what it was in the budget estimates (₹6.23 lakh crore) for the financial year 2024-25, and around 6% more than last year's revised estimates (₹6.41 lakh crore), the budget documents show. To be sure, finance minister Nirmala Sitharaman did not touch upon the defence allocation in her budget speech.

This year's allocation includes a revenue expenditure of ₹3.11 lakh crore and a pension outlay of ₹1.6 lakh crore. It accounts for 1.9% of the country's projected gross domestic product (GDP) for 2024-25, and 13.45% of the government's budget.

Revised estimates in the budget documents show that the armed forces were unable to spend ₹12,500 crore of last year's capital outlay of ₹1.72 lakh crore.