New Delhi: In a major financial milestone, the Ministry of Defence (MoD) has fully utilized its ₹1.86 lakh crore capital outlay for the country’s armed forces in the financial year 2025-26, as per revised estimates.
This achievement, driven by coordinated efforts from MoD (finance), acquisition wing, defence services, and Defence Accounts Department, follows last year's complete utilization after several years.
The overall defence budget utilization, including MoD (civil) and pensions, reached an impressive 99.62% of the final allocation. Originally set at ₹1.80 lakh crore, the capital budget saw augmentation from the Ministry of Finance, fueled by strong spending in the first two quarters and heightened modernization needs post-Operation Sindoor.
Key expenditures targeted critical upgrades: acquisitions of multi-role fighter aircraft and aero engines topped the list, alongside land systems, electronic warfare gear, armaments, shipbuilding, aviation stores, and projectiles.
Notable procurements included medium-altitude long-endurance remotely piloted aircraft (RPA) for the Indian Air Force, mine countermeasure vessels for the Indian Navy, quick-reaction surface-to-air missile systems, and Nag-Mk2 missile for the Indian Army.
Beyond bolstering military capabilities, the spending spree supports border infrastructure development and fuels economic growth via capital formation and job creation.
The defence ministry ramped up approvals dramatically: acceptance of necessity (AoN) for 109 proposals worth ₹6.81 lakh crore in FY 2025-26, up from 56 proposals at ₹1.76 lakh crore the previous year. It also inked capital procurement contracts for 503 proposals totaling ₹2.28 lakh crore.
Looking ahead, the capital budget for FY 2026-27 jumps 22% to ₹2.19 lakh crore at the budget estimate stage, signalling sustained momentum in arming India's forces.
