Union Budget 2026–27 Strengthens Make-in-India In Defence Sector

New Delhi, Feb 2 (KNN) The Union Budget 2026–27 has placed strong emphasis on defence indigenisation and domestic manufacturing, with the Ministry of Defence receiving a record allocation of Rs 7.85 lakh crore. 

The enhanced outlay reflects the government’s focus on strengthening indigenous capability while meeting evolving security requirements.

Major Boost for Domestic Defence Industry

The government has earmarked Rs 1.39 lakh crore or around 75 per cent of the capital acquisition budget for procurement from domestic industries, including private sector players.

Increased Allocation for Defence Research and Development

The Defence Research and Development Organisation (DRDO) has been allocated Rs 29,100.25 crore for FY 2026–27, up from Rs 26,816.82 crore in the previous year. 

Capital expenditure accounts for Rs 17,250.25 crore of the total allocation.

The increased funding is expected to support indigenous research, technology development, and innovation in advanced defence systems.
 
Enhanced Healthcare Support for Veterans

The Budget has significantly raised allocation for the Ex-Servicemen Contributory Health Scheme (ECHS) to Rs 12,100 crore, a 45.49 per cent increase over FY 2025–26 BE. 

The funds will primarily cover medical treatment-related expenditure for veterans and their dependents.

Over the past five years, ECHS allocations have increased by more than 300 per cent, reflecting a sustained focus on veterans’ welfare.

Defence Pensions See Moderate Increase

Defence pension expenditure for FY 2026–27 has been set at Rs 1,71,338.22 crore, an increase of 6.56 per cent over the previous year. 

The allocation will support pension disbursement to over 34 lakh beneficiaries through the SPARSH system and other authorised channels.

(KNN Bureau)