Ministry of Defence Utilizes Over 50% of FY 2025-26 Capital Outlay by End of September
In the financial year 2025-26, the Ministry of Defence (MoD) has reported a significant milestone, utilizing over 50% of its capital outlay by the end of September 2025. This translates to a capital expenditure of Rs 92,211.44 crore, which is 51.23% of the total allocation of Rs 1,80,000 crore. This follows a complete utilization of capital expenditure amounting to Rs 1,59,768.40 crore in the previous financial year. The timely expenditure is expected to facilitate the delivery of essential military platforms, contributing to the modernization of the Armed Forces.
Capital Expenditure Breakdown
The MoD’s capital expenditure is crucial for acquiring new assets and enhancing national security. The majority of the spending has been directed towards aircraft and aero engines, followed by investments in land systems, electronic warfare equipment, armaments, and projectiles. This strategic allocation not only supports the modernization of military capabilities but also plays a vital role in research and development, as well as infrastructure development in border areas. Such investments are essential for maintaining the country’s defense readiness and have a positive impact on economic growth and job creation.
Commitment to Full Utilization
The Ministry of Defence is on track to fully utilize its capital allocation by the end of the current financial year. With several major projects at advanced stages of approval, the MoD is optimistic about meeting its budgetary goals. The capital allocation for this fiscal year was set at Rs 1,80,000 crore, reflecting a 12.66% increase compared to the actual expenditure of the previous year. The Ministry is also preparing revised budgetary projections to ensure that all allocated funds are effectively utilized.
Support for Domestic Industries
Since the financial year 2020-21, the MoD has been actively supporting domestic industries by earmarking funds for local procurement. For the current fiscal year, Rs 1,11,544.83 crore has been allocated specifically for domestic industry procurement, with 45% of this amount already spent. This initiative aims to promote self-reliance in defense technology and manufacturing, encouraging participation from micro, small, and medium enterprises (MSMEs) and startups. Over the past five years, the allocation for capital outlay in defense services has increased by approximately 60%, highlighting a consistent trend towards strengthening domestic capabilities.
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