Union Budget 2025 | Defence Ministry gets biggest chunk of allocation

Defence Ministry gets an allocation of Rs 6.81 lakh crore

New Delhi: With an allocation of Rs 6.81 lakh crore, the Defence Ministry has pocketed the biggest chunk of the allocation in the 2025-26 Union Budget, but the outlay for capital allocation stands below five per cent.

Union Finance Minister Nirmala Sitharaman proposed an allocation of Rs 6.81 lakh crore for the Defence Ministry, out of which Rs 180,000 crore has been earmarked for capital outlay. This is only 4.65 per cent higher than the budgetary estimate of 2024-25.

Out of the money proposed under capital outlay, Rs 1,48,723 crore is planned to be spent on capital acquisition for the armed forces while the remaining Rs 31,277 crore is for capital expenditure on research and development and creation of infrastructural assets.

Payments for long endurance remotely piloted aircraft of high and medium altitude, stage payment of deck-based aircraft, next generation submarines or ships can be made out of this allocation.

To encourage private sector for manufacturing and technological development in the defence sector, 75 per cent of the modernisation budget has been earmarked for procurement through domestic sources and 25 per cent of domestic share will be procurement from home-grown private industries.

In absolute terms, this means military items and sensors worth nearly Rs 28,000 crore will be purchased from private defence companies of India.

On the revenue head, allocation for the armed forces stands at Rs 3,11,732 crore which is close to 46 per cent of total budget. Defence pension receives a share of Rs 1,60,795 crore, which is more than 23 per cent and the balance is for civil organisations under the defence ministry.

The allocation, according to a Defence Ministry official, will not only take care of major acquisitions planned in the next fiscal, but will facilitate the armed forces' plan to venture in new domains such as cyber, space and emerging technologies like artificial intelligence, machine learning and robotics.

Other highlights include a 43 per cent hike in capital budget for the Indian Coast Guard and allocation of more than Rs 7,000 crore to the Border Roads Organisation to help complete critical infrastructure projects like LGG-Damteng-Yangtse link close to India-China disputed boundary in Arunachal Pradesh; Asha-Cheema-Anita stretch in J&K and Birdhwal-Puggal-Bajju in Bikaner district in Rajasthan.

Union Budget 2025 | Nirmala Sitharaman, as Finance Minister, presented her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', the Modi govt gave income tax relief for those making up to Rs 12 lakh per year in salaried income. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.