India Allocates $85.6 Billion to Defence, Largest Share of Budget

The Union Budget 2026-27 has allocated a record ₹7.85 lakh crore (≈ $85.6 billion) to the Ministry of Defence, making it the single largest component of government spending and accounting for 14.68% of the total budget. This marks a sharp increase from last year’s ₹6.81 lakh crore, underscoring India’s focus on military preparedness, modernization, and national security.

Key Highlights of Defence Allocation

• Total Allocation: ₹7.85 lakh crore (FY 2026-27)
• Share of Union Budget: 14.68%
• Increase from Previous Year: Up from ₹6.81 lakh crore in FY 2025-26
• Capital Outlay (Modernisation): ₹2.19 lakh crore earmarked for new equipment, fighter jets, and infrastructure upgrades
• Revenue Expenditure: ₹5.53 lakh crore for salaries, allowances, maintenance, and operational preparedness
• Defence Pensions: Continued support for retired personnel
• Civil Establishments: Administrative and institutional spending under MoD

Breakdown of Spending

Category	Allocation (₹ lakh crore)	Purpose
Capital Outlay	2.19	Modernisation, fighter jets, infrastructure
Revenue Expenditure	5.53	Salaries, allowances, maintenance, operations
Defence Pensions	~0.9 (approx.)	Retired personnel support
Civil Establishments	Included in total	Administrative costs

Implications

• Military Readiness: Enhanced funding for modernisation ensures India’s armed forces remain equipped to handle future challenges.
• Innovation & Technology: Investment in defence R&D and procurement of advanced systems strengthens indigenous capabilities.
• Personnel Welfare: Sustained focus on salaries, pensions, and allowances reflects commitment to the welfare of serving and retired personnel.
• National Security: Reinforces India’s strategic posture amid regional tensions and global security challenges.

In summary: The ₹7.85 lakh crore allocation to defence in Union Budget 2026-27 is not just the largest share of government spending but also a clear signal of India’s intent to modernize its military, safeguard sovereignty, and invest in long-term national security.