New Delhi, Feb 1 (NationPress) The government's decision to increase the defence budget allocation by 15% for the Financial Year 2026-27 is poised to not only modernise the armed forces but also address ongoing financial needs. This budgetary enhancement comes in response to the urgent procurement of arms and ammunition following Operation Sindoor, encompassing both Capital and Revenue requirements, as stated by officials on Sunday.

The defence sector has been allocated a remarkable sum of Rs 7.85 lakh crore for FY 2026-27.

This allocation represents 2% of the projected GDP for the upcoming fiscal year, marking a notable increase of 15.19% compared to the Budgetary Estimates (BE) for FY 2025-26.

The overall defence budget constitutes 14.67% of the total central government spending, making it the largest allocation among all ministries.

A substantial portion of this budget, amounting to Rs 2.19 lakh crore, has been designated for capital expenses, compared to Rs 1.80 lakh crore allocated in the BE for FY 2025-26.

The government has reiterated its commitment to upgrading the armed forces to global standards, with a strategic focus on achieving Aatmanirbhar Bharat.

According to the Defence Ministry, of the total budget for the Ministry of Defence (MoD), 27.95% is earmarked for capital expenditures, 20.17% for operational readiness, 26.40% for personnel pay and allowances, 21.84% for pensions, and 3.64% for civil organizations.

In light of the current global political landscape, a significant boost in the modernisation budget is essential. Upcoming capital acquisition projects aim to equip the armed forces with state-of-the-art fighter jets, advanced weaponry, naval vessels, unmanned aerial vehicles, drones, and specialized vehicles.

The ministry's initiative to allocate funds towards enhancing domestic industries has been reinforced by reserving Rs 1.39 lakh crore—which is 75% of the Capital Acquisition budget—for procurement from local businesses during FY 2026-27.

This fund allocation is intended to encourage domestic manufacturers and enhance their involvement in the armed forces' capability development.

The increased funding for capital acquisition, particularly for local industries, is expected to have a long-term positive effect on the national economy, fostering growth in ancillary sectors and creating job opportunities, as per the ministry's statement.

The budget for the Defence Research and Development Organisation (DRDO) has been raised to Rs 29,100.25 crore for FY 2026-27, up from Rs 26,816.82 crore in FY 2025-26, with a significant portion of Rs 17,250.25 crore allocated for capital expenditures.

The total budget for defence pensions is now Rs 1,71,338.22 crore, reflecting a 6.56% increase over the previous year's BE. This will facilitate the monthly pension payments to over 34 lakh pensioners through SPARSH and other disbursement authorities, according to the ministry.