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The Ministry of Defence has fully utilised its capital budget of Rs 1.86 lakh crore for 2025–26, marking a second consecutive year of complete spending after a prolonged gap and signalling a greater push towards modernisation.
Officials said the achievement was the result of coordinated efforts by the finance division, the acquisition wing, the armed forces, and the defence accounts department. Overall utilisation of the defence budget, including civil expenditure and pensions, stood at 99.62 per cent of the final allocation.
The capital outlay, initially pegged at Rs 1.80 lakh crore, was later enhanced by the Finance Ministry following strong spending momentum in the first half of the financial year and additional requirements from the services, particularly in the aftermath of Operation Sindoor.
A substantial share of the expenditure went into aircraft and aero engines, underlining the priority accorded to air power. It was followed by spending on land systems, electronic warfare capabilities, armaments, shipbuilding, aviation stores and ammunition.
Key acquisition programmes during the year included multi-role fighter aircraft, medium-altitude long-endurance remotely piloted aircraft for the Air Force, mine countermeasure vessels for the Navy, and systems such as quick-reaction surface-to-air missiles and the Nag Mk-2 anti-tank guided missile for the Army.
Beyond force modernisation, the Ministry said the capital spending would also accelerate infrastructure development in border areas while generating broader economic gains through higher capital formation and employment.
The pace of acquisitions also gathered momentum during the year. The Ministry accorded Acceptance of Necessity (AoN) for 109 proposals worth Rs 6.81 lakh crore in 2025–26, a sharp jump from 56 proposals valued at Rs 1.76 lakh crore cleared the previous year. Contracts were signed for 503 procurement cases amounting to Rs 2.28 lakh crore.
For 2026–27, the government has further stepped up allocations, earmarking Rs 2.19 lakh crore under the capital head at the Budget Estimates stage, a 22 per cent increase, indicating continued emphasis on capability enhancement across the armed forces.
Team BharatShakti
