Central Budget 2026–27 allocated the highest budget to the defence sector

In the Central Budget 2026–27, the Ministry of Defence received the highest-ever allocation of ₹7.85 lakh crore, which is 15.19% higher than the budget estimates (BE) of FY 2025–26, accounting for 14.67% of the central budget and the highest among all ministries.

• India’s defence budget has increased from ₹2.53 lakh crore in 2013–14 to ₹7.85 lakh crore in 2026–27, an increase of about ₹5.32 lakh crore, nearly a threefold rise.
• Out of the total allocation to the Ministry of Defence, 27.95% of the defence budget allocation is for capital expenditure, 20.17% for revenue expenditure on maintenance and operational readiness, 26.40% for revenue expenditure on salaries and allowances, 21.84% for defence pensions, and 3.64% for civil organisations.
• This budget came after ‘Operation Sindoor,’ which tested India’s combat readiness under real conditions and places national security at the centre of India’s long-term vision of self-reliance.
• Finance Minister Nirmala Sitharaman presented the budget for the financial year 2026–27 in the Lok Sabha on 1 February 2026. This is her record ninth budget.

Summary of the defence budget

• The capital allocation for the Border Roads Organisation (BRO) has been increased to ₹7,394 crore for FY 2026–27. The increased allocation to BRO will help modernise strategic projects such as tunnels, bridges, airports, etc.
• The budget allocation for the Defence Research and Development Organisation (DRDO) has been increased from ₹26,816.82 crore in FY 2025–26 to ₹29,100.25 crore in FY 2026–27. Out of this allocation, a major portion of ₹17,250.25 crore has been allocated for capital expenditure.
• An allocation of ₹12,000 crore has been made for the Ex-Servicemen Contributory Health Scheme (ECHS) in FY 2026–27, which is 45.49% higher than the budget estimates of FY 2025–26.
• ECHS assists in medical treatment-related expenses (MTRE) for ex-servicemen and their dependents. Over the past five years, the allocation for ECHS has increased by more than 300% at the BE stage compared to FY 2021–22.
• The total allocation for defence pensions is more than ₹1.71 lakh crore, which is 6.56% higher than the budget estimates of FY 2025–26.
• This amount assists in the monthly pension distribution to more than 34 lakh pensioners, which is distributed through SPARSH and other authorised pension disbursing authorities.
• Special emphasis has been placed on defence modernisation in the Central Budget 2026–27, resulting in a capital allocation of more than ₹2.19 lakh crore for the armed forces.
• ₹1.39 lakh crore has been earmarked for procurement from domestic defence industries, with about 75% of the total capital acquisition budget reserved for domestic defence industries.