Union Budget 2025: Defence sector allocation up 9% to Rs 6.81 lakh crore

New Delhi: Union Finance Minister Nirmala Sitharaman on Saturday presented her 8th Budget in a row and allocated Rs 6.81 lakh crore for the defence sector in 2024-25, which saw a rise of over 9 per cent from the previous budget.

In 2024-25, she had given Rs 6.22 lakh crore to the defence sector. Reflecting India’s strategic priorities amid a complex geopolitical environment, the budget allocation of Rs 6.81 lakh crore marked a slight hike from the previous year.

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Emphasizing the modernization drive of the three services — Indian Army, Indian Navy, and Indian Air Force — and enhancing domestic defence production, a capital outlay of Rs 1.80 lakh crore has been earmarked to further strengthen the capabilities of the Armed Forces. This saw an increase of around 13 per cent from last year, which stood at Rs 1.59 lakh crore in Revised Estimates. However, the Budget Estimates were at Rs 1.72 lakh crore.

Here, a budget estimate means a prediction of the money needed for a project or program in the current financial year, while the revised estimates are updated projections that reflect changes in actual revenue and spending compared to budget estimates (BE).

The DRDO has been allocated Rs 14,923 crore for research and development works. For aircraft and aero engines, Rs 48,614 crore has been earmarked for this financial year against Rs 46,591 crore last year.

A total of Rs 1,494 crore has been earmarked for investment in the seven public enterprises, which were corporatized from Defence Ordnance Factories. A defence pension of Rs 1.60 lakh crore has been earmarked for FY 2025-26, against Rs 1.57 lakh crore RE and Rs 1.41 lakh crore BE.

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The ongoing standoff at the Line of Actual Control has prompted the government to continue focusing on enhancing the border infrastructure. The Border Roads Organisation has been provided Rs 7,134 crore against Rs 6,500 crore.