Union Budget 2026-27 Increases Defence Spending By 15% To Modernise Armed Forces After Operation Sindoor

The Union Budget 2026-27 raises defence spending by 15 per cent, aiming to upgrade the armed forces and fund their regular operational needs. It also covers costs from emergency procurement of weapons and ammunition after Operation Sindoor.

For the new financial year, the Ministry of Defence (MoD) will receive a record Rs 7.85 lakh crore, representing 2 per cent of projected GDP.

This marks a 15.19 per cent increase over the previous year’s budget estimate. Defence now accounts for 14.67 per cent of total central expenditure, the largest share among government ministries.

The budget sets aside Rs 2.19 lakh crore for capital expenditure, up from Rs 1.80 lakh crore in FY 2025-26. This step reflects the government’s commitment to modernising the armed forces and achieving world-class military capabilities under the Aatmanirbhar Bharat framework.

Modernising the Armed Forces

The Ministry of Defence specified, “Out of the total allocation made to the Ministry of Defence (MoD), a share of 27.95 per cent is for capital expenditure, 20.17 per cent for revenue expenditure on sustenance and operational preparedness, 26.40 per cent for revenue expenditure on pay and allowances, 21.84 per cent for defence pensions, and 3.64 per cent for civil organisations.”

Funds for capital acquisition will equip the military with next-generation fighter aircraft, precision weapons, ships, submarines, drones, and specialised vehicles.

Domestic industries will supply Rs 1.39 lakh crore, which accounts for 75 per cent of this allocation. This move will boost self-reliance and encourage long-term investment in Indian defence manufacturing.

This focus on local production is expected to strengthen ancillary industries, create employment, and support economic growth. The budget for the Defence Research and Development Organisation (DRDO) rises to Rs 29,100.25 crore. Out of this, Rs 17,250.25 crore has been earmarked specifically for capital projects.

Defence pensions will receive Rs 1,71,338.22 crore. This represents a 6.56 per cent increase and will cover over 34 lakh pensioners through SPARSH and other systems.

The Union Budget 2026-27 demonstrates India’s determination to modernise the armed forces. It also aims to improve strategic preparedness and expand domestic defence manufacturing, creating a stronger, self-reliant, and future-ready military.

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