Budget 2026: Agnipath outlay jumps to 56%, defence pensioners also gain

Alongside raising allocations for the Agnipath scheme, the government has also strengthened its commitment to one rank one pension for retired personnel

2 min read | Updated On : Feb 01 2026 | 4:24 PM IST

Martand Mishra

Chief of Defence Staff interacts with Agniveer trainees at Maratha Regimental Centre & Airman Training School, Belagavi in May 2024 (Photo: PIB)

The Union government on Sunday allocated ₹171,338.22 crore for defence pensions in FY27, as compared to last year’s revised estimates (RE) of ₹169,186.50 crore, a rise of 1.27 per cent, while increasing the allocation for the contractual Agnipath scheme by 56 per cent to ₹15,173.68 crore.

The allocation in the defence pensions is ₹10,543 crore more than last year’s ₹160,795 crore BE, a 6.55 per cent rise, strengthening the government’s commitment towards one rank one pension for retired personnel.

Of the total allocation for pensions, the army's share has risen from ₹141,751 crore in FY26 to ₹151,631 crore in FY27. The navy’s pension bill has grown from ₹9,463.80 crore to ₹10,023.60 crore, while the air force allocation remains largely stable at ₹17,646.13 crore, even lower than the RE ₹17,656.27 of the previous year.

Overall, pensions and retirement benefits together stand at ₹179,300.79 crore for FY27, marking a year-on-year increase of more than ₹10,500 crore.

The Army has sharply raised allocations for the Agnipath scheme- a 4-year contractual recruitment system launched in 2022- a 61 per cent jump from ₹9,414.22 crore in BE FY26. The RE for FY26 was 9,697.22.

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The surge comes as the first batch of Agniveers completes their four-year tenure this year, giving an indication of the government plan to induct them in the forces going forward.

According to the Ministry of Defence’s SPARSH (System for Pension Administration – RAKSHA), a centralised web platform for the disbursement of pensions across the armed forces and defence civilians, the portal now covers 23,04,263 pensioners from army, 220,094 from air force, and 105,344 from navy, besides 555,093 defence civilians.

The government allocated ₹7.85 trillion to the defence sector in the Union Budget 2026-27, up from ₹6.81 trillion last year, marking a 15.3% increase, with a push for military readiness, modernisation, and personnel welfare.

Written By

Martand Mishra

Martand Mishra has started his reporting career with defence coverage. He is a graduate of the Indian Institute of Mass Communication. He enjoys reading books on defence, history and biographies.

First Published: Feb 01 2026 | 4:24 PM IST

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Budget 2026