Finance Minister Nirmala Sitharaman on Sunday set aside Rs 7,84,678 crore as the defence outlay for 2026-27, as against last year's allocation of Rs 6,81,210 crore. This is 2 per cent of the estimated GDP for the next financial year and shows an increase of 15.19 per cent over the Budgetary Estimates (BE) of FY 2025-26.
The budgetary allocation under the capital head for the defence forces is at Rs 2,19,306.47 crore, which is 21.84 per cent more than the Budget Estimates of FY 2025-26. Of this, Rs 1.85 lakh crore is earmarked for capital acquisition, which is nearly 24 per cent higher than the capital acquisition budget for FY 2025-26.
The Ministry of Defence said that in addition to the modernisation of the armed forces and financing their regular requirements, the significantly enhanced allocation—14.67 per cent of the Union government's expenditure—will also cater for the financial requirements that have arisen due to the emergency procurement of arms and ammunition made post-Operation Sindoor.
But does it mean India has now become a country that spends most of its budget allocation on defence? Well, the largest chunk of allocation in Nirmala Sitharaman's ninth budget went to the Ministry of Finance—receiving 36.89% of the total allocation. Defence came second, receiving 14.67% of the allocations.
If you are wondering how much was allotted to prominent ministries, check out the following list:
