New Delhi: Meeting expectations, Union Finance Minister Nirmala Sitharaman has hiked the defence capital budget by a whopping 21.8 percent, taking the figure to Rs 2.19 lakh crore with major increase in funds allocated for aircraft and aero engines.
The overall defence budget has seen a hike of 15 percent, taking it to Rs 7.84 lakh crore from Rs 6.81 lakh crore this fiscal. The pension bill in the defence budget stood at Rs 1.71 lakh crore, a rise from Rs 1.60 lakh crore for the current fiscal.
Overall, the defence budget stands at 1.99 percent of the GDP.
The outlay on research and development has been hiked to Rs 17,250 crore in financial year 2026-2027, from Rs 14,923 crore this fiscal.
The increase in capital budget takes into account a slew of mega contracts set to be signed next fiscal, including the one for 114 Rafale fighter jets for the Indian Air Force (IAF), as reported by ThePrint.
While the payments are staggered over a period of time, contract signing will involve outright payment of between 4-10 percent of the contract value depending on the terms agreed upon.
While Sitharaman had earmarked Rs 1.80 lakh crore in budgetary estimates last February for the current fiscal, the revised estimates stood at Rs 1.86 lakh crore.
This fiscal, the budget for aircraft and aero engines was Rs 48,614.06 crore, and was revised to Rs 72780.15. The allocation under the new budget stands at Rs 63,733.94 crore.
The revenue budget has also seen a hike. While this year, Rs 3.11 lakh crore was earmarked, it was revised to Rs 3.49 lakh crore. The budget for next fiscal has earmarked Rs 3.65 lakh crore. Of this, 1.18 lakh crore is earmarked for the pay and allowance of the Indian Army, Rs 20,536 crore for the Indian Air Force and Rs 9,662.50 crore for the Indian Navy.
In a statement, defence minister Rajnath Singh said that this year, a provision of Rs 2.19 lakh crore has been made for the overall capital expenditure of the armed forces.
“The most important aspect of this budget is the modernisation of our three services. For this, a provision of Rs 1.85 lakh crore has been made this year, which is approximately 24 percent higher than the previous financial year. As a result of this increase, our military capability will become even more powerful,” he added, welcoming the budget presented by Sitharaman Sunday.
(Edited by Nida Fatima Siddiqui)
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