Union Budget 2026–27 Allocates Record Rs 7.85 Lakh Crore For Defence, Focus On Modernisation

New Delhi, Feb 2 (KNN) The Union Budget 2026–27 has earmarked an all-time high allocation of Rs 7.85 lakh crore for the Ministry of Defence, marking a 15.19 per cent increase over the Budget Estimates of FY 2025–26. 

The allocation constitutes nearly 2 per cent of the estimated GDP and accounts for 14.67 per cent of total Central Government expenditure, the highest among all ministries.

The enhanced allocation comes in the aftermath of Operation Sindoor and is aimed at strengthening military preparedness, modernisation, and operational capability across the Armed Forces.
 
Capital Expenditure Sees Significant Expansion

Capital outlay for defence has been raised to Rs 2.19 lakh crore in FY 2026–27, representing a 21.84 per cent increase over the previous year. Of this, Rs 1.85 lakh crore has been allocated for capital acquisition—about 24 per cent higher than FY 2025–26 BE.

The increased capital provision is expected to support the acquisition of next-generation fighter aircraft, advanced weapon systems, naval platforms, unmanned systems, drones, and specialised vehicles. 

During FY 2025–26, contracts worth Rs 2.10 lakh crore were finalised up to December 2025, while Acceptance of Necessity approvals crossed Rs 3.50 lakh crore.
 
Operational Readiness and Revenue Support

Under revenue heads, the defence budget provides Rs 3.65 lakh crore, reflecting a 17.24 per cent rise over the previous year. Of this, Rs 1.58 lakh crore has been earmarked for operational sustenance, including procurement of spares, maintenance of platforms, and routine operational requirements. The remaining allocation covers salaries and allowances.

The government stated that the increased revenue support would ensure sustained operational readiness of the Armed Forces.
 
Border Infrastructure Strengthened

The Budget has enhanced capital allocation for the Border Roads Organisation (BRO) to Rs 7,394 crore in FY 2026–27, up from Rs 7,146.50 crore in FY 2025–26. 

The funds will support strategically important infrastructure projects such as tunnels, bridges, and airfields, while improving connectivity and promoting regional development in border areas.

(KNN Bureau)