In alignment with the vision of a ‘Viksit Bharat’ by 2047, the defence ministry’s total allocation for FY 2025-26 stands at Rs 6,81,210.27 crore, a 9.53 percent increase over the previous fiscal. This amount includes a significant focus on modernisation, with Rs 1,80,000 crore allocated for Capital Outlay on Defence Services.
Of this, 75 percent will be directed towards domestic procurement, supporting India’s push for self-reliance in defence technology. The remaining funds will be spent on critical infrastructure and R&D in emerging sectors such as Artificial Intelligence and robotics.
Furthermore an allocation of Rs 8,317 crore for the Ex-Servicemen Contributory Health Scheme (ECHS) has been made, marking a 19.38 percent increase over the FY 2024-25 Budget Estimate (BE). In addition to this, additional funds were allocated mid-year to meet urgent medical treatment requirements.
The Defence Pension Budget also saw a significant boost, with Rs 1.61 lakh crore earmarked for FY 2025-26, up 13.87 percent from the previous year. This increase takes into account inflationary trends and is intended to support the financial security of the 34 lakh defence pensioners, who are directly impacted by the One Rank One Pension (OROP) scheme.
The third revision of OROP, which took effect in July 2024, ensures timely enhancements to pension benefits for ex-servicemen.
The Union Budget emphasised the strengthening of border infrastructure with an allocation of Rs 7,146.50 crore for the Border Roads Organisation (BRO). This 9.74 percent increase over FY 2024-25 will support the construction of key strategic roads and bridges, including projects in Arunachal Pradesh, Jammu and Kashmir, and Rajasthan.
The budgetary provision also aims to generate employment, enhance socio-economic development, and promote tourism in border areas.
The allocation for the Defence Research and Development Organisation (DRDO) has also been increased to Rs 26,816.82 crore, a 12.41 percent rise from FY 2024-25. This will facilitate the development of cutting-edge technologies and support India’s growing defence innovation ecosystem.
Additionally, Rs 449.62 crore has been earmarked for the iDEX scheme, which encourages innovation and collaboration with the private sector.
In another major move, the Indian Coast Guard (ICG) received a 26.50 percent increase in its total budget, reaching Rs 9,676.70 crore. This funding boost will enhance the ICG’s operational capabilities and enable the acquisition of advanced vessels and equipment.
Defence Minister Rajnath Singh lauded the Finance Minister’s budget, noting that it aligns with Prime Minister Narendra Modi’s vision for a modern, self-reliant, and strategically advanced Armed Forces. This budget not only ensures the defence sector’s preparedness for modern warfare but also provides substantial welfare benefits to veterans and their families