Budget 2025: Defence gets Rs 6.81 trn; aircraft, engines, ships in focus

The MoD has designated 2025 as the 'Year of Reforms', announcing in December that the Defence Acquisition Procedure 2020 is 'expected to undergo a complete revamp' this year

Finance Minister Nirmala Sitharaman on Saturday allocated Rs 6.81 trillion for the Ministry of Defence (MoD) for the financial year 2025-26 (FY26), up from last year's outlay of Rs 6.22 trillion.

 

The Capital Outlay on Defence Services has been pegged at Rs 1.8 trillion, up from Rs 1.72 trillion last year.

 

The revenue expenditure has been pegged at Rs 4.89 trillion, including Rs 1.61 trillion for pensions.

 

Under capital expenditure, Rs 48,614 crore has been set aside for aircraft and aero engines, while Rs 24,391 crore has been allocated for the naval fleet. An amount of Rs 63,099 crore has been set aside for other equipment.

 

Previously, the capital budget clearly outlined allocations for each of the three services, with separate sub-heads for the army, navy, and air force. However, since the last Budget, these allocations have been consolidated into a single grouping, making it difficult to distinguish the funding designated for each service.

 

The MoD has designated 2025 as the "Year of Reforms", announcing in December that the Defence Acquisition Procedure (DAP) 2020 is "expected to undergo a complete revamp" this year.

 

The defence budget for FY26 is presented against the backdrop of growing challenges, as neighbouring countries, particularly China, continue to advance their military capabilities, including enhancements in air power and naval fleets.