The Indian Defence Budget for the fiscal year 2025-26 has been set at ₹6,81,210 crore, reflecting a 9.53% year-on-year increase. This budget constitutes 13.45% of the total Union Budget, making it the highest allocation among all ministries. However, the capital allocation for new procurements saw only a marginal increase of 4.65%, raising concerns about the pace of modernization amidst inflation and currency fluctuations.
Breakdown of Defence Budget 2025-26
| Category | Allocation (₹ in crore) |
|---|---|
| Revenue Expenditure | 3,11,732.30 |
| Capital Expenditure | 1,80,000 |
| Defence Pensions | 1,60,000 |
| Civil Expenditure | 28,682.97 |
Key Highlights of the Defence Budget 2025
1. Modernization and Capital Expenditure
- ₹1.8 lakh crore has been earmarked for capital expenditure, of which ₹1,48,722.80 crore will be spent on capital acquisition and modernization of the armed forces.
- ₹31,277.20 crore will be utilized for Research & Development (R&D) and infrastructure development.
- The government has allocated ₹1.12 lakh crore for procurement from domestic industries, in line with the Atmanirbhar Bharat (Self-Reliant India) initiative.
2. Delayed Defence Procurement and Upcoming Deals
Despite increased allocations, ₹12,500 crore is expected to be returned from the previous year’s estimates, highlighting the slow pace of defence procurement. However, a few major deals are anticipated before the end of the fiscal year:
- 26 Rafale-M fighter jets for aircraft carriers and three Scorpene-class submarines, with an estimated cost of $10 billion.
- 307 Advanced Towed Artillery Gun Systems (ATAGS) for the Army, worth approximately ₹8,000 crore.
3. Major Boost for Indian Coast Guard (ICG)
The Indian Coast Guard (ICG) received a 26.5% increase in total allocation and a significant 43% rise in capital budget, aimed at strengthening coastal security and emergency response capabilities.
- The capital budget increase from ₹3,500 crore to ₹5,000 crore will support the acquisition of:
- Advanced Light Helicopters (ALH)
- Dornier aircraft
- Fast Patrol Vessels
- Training ships and interceptor boats
4. Defence Pensions and Welfare Measures
- Defence pensions saw a 13.87% hike, reaching ₹1.6 lakh crore, ensuring financial stability for ex-servicemen and their families.
- The Ex-Servicemen Contributory Health Scheme (ECHS) was allocated ₹8,317 crore, marking a 19.38% increase from the previous year.
- The One Rank One Pension (OROP) scheme, implemented since July 2014 and revised every five years, saw its third revision in July 2024.
5. Infrastructure Development: Border Roads Organisation (BRO)
The Border Roads Organisation (BRO) received ₹7,146 crore in capital allocation, up 9.74% from 2024-25. The funds will support strategic infrastructure projects, including:
- LGG-Damteng-Yangtse (Arunachal Pradesh)
- Asha-Cheema-Anita (Jammu & Kashmir)
- Birdhwal-Puggal-Bajju (Rajasthan)
- BRO has also employed 70,000 local youths, contributing to regional economic development.
Conclusion
While the Indian Defence Budget 2025 shows an overall increase, the marginal hike in capital allocations raises concerns about the slow pace of modernization. The significant boost in defence pensions, ICG expansion, and border infrastructure development indicates the government’s focus on security and welfare. However, addressing delays in procurement and ensuring efficient fund utilization will be crucial for maintaining India’s military preparedness and strategic dominance.
With major deals in the pipeline and a push for domestic defence manufacturing, the budget aligns with India’s long-term defence and security objectives, though challenges remain in execution and timely implementation.
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