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Ministry of Defence | Defence Research and Development Organisation (DRDO) | Border Roads Organisation (BRO)
The Government of India has proposed a record-breaking ₹7.85 lakh crore allocation for the Ministry of Defence in the Union Budget 2026-27, marking a 15.19% increase over the previous year. This historic allocation, the highest among all ministries, accounts for 14.67% of total Central Government expenditure and reflects a three-fold rise since 2013-14. The budget is strategically distributed: 27.95% is dedicated to capital expenditure for modernization, while 21.84% is earmarked for defense pensions supporting over 34 lakh veterans.
Technological Modernisation and Border Infrastructure A central priority is the acquisition of next-generation capabilities and the strengthening of strategic borders:
Capital Outlay: The budget for capital acquisition has surged to ₹1.85 lakh crore, a 24% increase intended to equip the Armed Forces with advanced fighter aircraft, submarines, and Unmanned Aerial Vehicles (UAVs).
Strategic Connectivity: The Border Roads Organisation (BRO) has received an enhanced allocation of ₹7,394 crore to modernize airfields, tunnels, and bridges in critical border regions.
Digital Defence: ₹975 crore is dedicated to the development of an Optical Fibre Cable-based network to ensure resilient communication for the Services.
What is the “Operation Sindoor” mentioned in the 2026-27 Defence Budget? Operation Sindoor is a strategic achievement of the Indian Armed Forces referenced in the 2026-27 Budget as a historic success that has shaped the government’s current focus on modernization and innovation. Following this operation, the budget prioritizes indigenous manufacturing and advanced technological capabilities to ensure that the Armed Forces remain resilient and self-reliant against evolving national security threats.
Policy Relevance
The 2026-27 Defence Budget signals a transition toward deep industrial self-reliance and veteran-centric health governance.
Institutionalizing ‘Aatmanirbhar Bharat’: By reserving 75% of the capital acquisition budget (₹1.39 lakh crore) for domestic industry, the government is forcing a shift in the defense ecosystem where private players and MSMEs become the primary suppliers for advanced weapons.
Opening R&D Ecosystems: The continued commitment to opening 25% of the defense R&D budget to startups and academia ensures that DRDO’s network of 2,000 industries can leverage 15 established Centres of Excellence for zero-fee technology transfers.
Veteran Healthcare Leap: The 45.49% increase in the Ex-Servicemen Contributory Health Scheme (ECHS) allocation to ₹12,100 crore addresses long-standing gaps in medical treatment expenditure, signaling a policy priority for the dignity of retired personnel.
Incentivizing MRO Hubs: Exempting basic customs duty on raw materials for aircraft parts supports India’s ambition to become a global Maintenance, Repair, and Overhaul (MRO) hub, fostering job creation and high-tech skill development.
Relevant Question for Policy Stakeholders: How can the Ministry of Defence and the BRO ensure that the ₹7,394 crore allocation is utilized to complete ‘all-weather’ connectivity to strategic points in the Eastern Sector by the 2027 deadline?
Follow the full news here: Defence in Union Budget 2026–27 | PIB