The Union Budget 2026 has raised the defence allocation to Rs 7.85 lakh crore in a strong push for military modernisation and operational readiness. This marks a significant rise from last year’s Rs 6.81 lakh crore allocation.
The government has significantly increased defence spending in the Union Budget 2026, allocating Rs 7.85 lakh crore for the sector. This marks a notable rise from last year’s Rs 6.81 lakh crore. The heightened allocation comes at a time when the Ministry of Defence is processing major procurement programmes, including upcoming contracts for Rafale fighter jets, submarines and advanced unmanned aerial vehicles.
Out of this total allocation, Rs 2.19 lakh crore has been earmarked specifically for the modernisation of the Armed Forces. This funding will support the acquisition of advanced weapon systems, cutting-edge technology, indigenous defence manufacturing and capability enhancement across the Army, Navy and Air Force.
Breakdown of defence allocation
The increased budget reflects a continued push towards self-reliance in defence (Aatmanirbhar Bharat), strengthening operational readiness and ensuring the forces remain equipped to meet emerging and future security challenges. According to the Budget papers, the total outlay for the Ministry of Defence in FY27 includes defence services revenue expenditure, capital outlay, defence pensions and spending on civil establishments under the ministry. The increased allocation aims to support both operational preparedness and long-term capability development.
Comparison with the previous budget
In the FY26 Budget, the Centre had assigned Rs 6.81 lakh crore to the defence sector, which was one of the largest components of government expenditure. Within that, defence services revenue expenditure amounted to Rs 3.12 lakh crore, covering salaries, allowances, equipment maintenance and operational requirements.
