Union Budget 2026: Tracking defence allocations under Modi government since 2014

Union Finance Minister Nirmala Sitharaman will present the Union Budget 2026-27 on February 1 (Sunday), and analysts are expecting a significant hike for the defence sector, considering the background of Operation Sindoor. Launched by India in response to the April 22 terror attack in Jammu and Kashmir’s Pahalgam that claimed 26 lives, Operation Sindoor is considered to be a turning point in the history of India-Pakistan military conflicts, as both sides extensively used drones and unmanned aerial vehicles (UAVs) to target each other’s military infrastructure.

Considering this and the crucial need to further modernise the armed forces, the Ministry of Defence (MoD) is seeking a 20 per cent hike in this year’s defence budget. “Given the growing, diversified industrial base that this country has in the defence space, we have the absorptive capacity to utilise those additional resources that we are seeking,” said Defence Secretary Rajesh Kumar Singh at an event in November last year.

How much has the Modi government spent on defence budget since coming to power in 2014?

After coming to power in 2014, the Modi government had hiked the defence budget by 12.43 per cent, allocating Rs 2.29 lakh crore. Of this, Rs 94,588 crore was reserved for capital outlay to modernise the armed forces. Along with this, it made a proposal to increase the Foreign Direct Investment (FDI) in the defence sector to 49 per cent.

In the Union Budget 2015-16, the Defence Ministry was allocated Rs 2.46 lakh crore, a 7.7 per cent hike. For FY 2016-17, the Modi government allocated Rs 2.49 lakh crore, just a meagre increase of less than 5 per cent. In FY 2017-18, the defence budget was Rs 2.74 lakh crore, excluding pensions. In total, the allocation was Rs 3.59 lakh crore.

For FY 2018-19, the defence budget was increased to Rs 2.95 lakh crore, a hike of 7.81 per cent. For FY 2019-20, the government allocated Rs 3.18 lakh crore. This number was increased to Rs 3.37 lakh crore for FY 2020-21.

In 2021-22, the government decided to allocate Rs 4.78 lakh crore to the defence budget. Excluding the pension outgo, the allocation for the armed forces was Rs 3.62 lakh crore. In 2022-23, Rs 5.25 lakh crore was allocated to the defence budget. This included Rs 1.19 lakh crore for defence pensions.

Similarly, in 2023-24, the defence budget received an allocation of Rs 5.94 lakh crore, including Rs 1.38 lakh crore for defence pensions and Rs 1.62 lakh crore for capital outlay. For FY 2024-25, the government allocated Rs 6.21 lakh crore to defence, including Rs 1.72 lakh crore for capital outlay. Similarly, for FY 2025-26, Rs 6.81 lakh crore to defence, including Rs 1.80 lakh crore for capital outlay.

Will the government accept MoD’s proposal and hike defence budget by 20 per cent?

Whether or not the Modi government increases defence spending by 20 per cent is a different question, as analysts point out that it is important to ensure that the defence sector has the ability to absorb the expenditure.

Speaking to India TV Digital, a former Indian Navy official said that the government needs to make changes to how defence spending is “planned and absorbed”. Otherwise, hiking the budget by such a huge margin will not deliver the desired result, the ex-official pointed out. 

“A 20 per cent hike is way too ambitious. I would call such an ask far-fetched if one looks only at past budget patterns. A 20 per cent hike is well above India’s historical norm and difficult to accommodate within overall fiscal constraints. In that sense, it is unlikely to be fully met in one go or in the near to medium term,” he said on the condition of anonymity.

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