Securing India's defence

Why funding national security needs a reboot and demands a holistic strategy

- Ruchika Chitravanshi & Bhaswar Kumar

As tensions between India and Pakistan flared up following the Pahalgam terror attack of April 22, in which 26 civilians were killed and which culminated in the launch of "Operation Sindoor", the adequacy and efficiency of India's defence funding are in focus again.

Six years before this incident, following the Pulwama terror attack in February 2019 that killed 40 CRPF personnel, the Narendra Modi government had added new terms of reference on national security for the 15th Finance Commission (FFC), led by economist and former bureaucrat NK Singh. In the reference in July 2019, the finance ministry asked the FFC to consider whether a separate system was needed to fund defence and internal security, and if so, how it could be implemented.

After Operation Sindoor, those questions are up for discussion again.

Earlier this month, the defence ministry invoked emergency powers to approve ₹40,000 crore for procurement of arms and ammunition. But with defence spending stagnant at 2-2.1 per cent of gross domestic product (GDP) for the past four years, experts argue it's time to revisit the funding model for national security, especially as tensions continue to simmer between the nuclear-armed nations.

State of funding India was the fifth-largest military spender globally in 2024, according to the Stockholm International Peace Research Institute (Sipri), which released the data in April 2025. The country lagged behind the United States, China, Russia, and Germany in this respect. Pakistan ranked 29th, with defence spending of $10.2 billion.

However, between financial year 2019-2020 (FY20) and FY25, India's defence expenditure as a percentage of central government expenditure declined from 16.9 per cent to 12.9 per cent. Its share in GDP declined from 2.25 per cent to 1.91 per cent during the same period.