Defence Ministry Utilises Over 50% of Capital Outlay by Mid-Year

• MoD Utilises 51% of FY26 Capital Budget: Big Boost for Armed Forces Modernisation

• Rs 92,000-Crore Defence Investment Powers Domestic Manufacturing, Says MoD

• Massive Defence Outlay Fuels Aatmanirbhar Bharat Momentum

New Delhi: By the end of September 2025, the Ministry of Defence (MoD) has utilised more than half of its capital outlay for FY 2025-26, signalling strong progress in defence modernisation and domestic capability building. Official data shows that the MoD has incurred capital expenditure worth Rs 92,211.44 crore, representing 51.23% of the total budgetary allocation of Rs 1,80,000 crore for the year.

In the previous financial year (FY 2024-25), the MoD had achieved full utilisation of its capital budget amounting to Rs 1,59,768.40 crore.

According to ministry officials, the robust pace of expenditure will ensure timely delivery of critical defence platforms such as aircraft, ships, submarines, and other weapon systems that are key to the modernisation of the Armed Forces. The majority of the expenditure so far has gone into aircraft and aero engines, followed by land systems, electronic warfare equipment, armaments, and projectiles.

Capital expenditure remains central to Defence as it supports acquisition of new assets, research and development, and infrastructure development in border areas, contributing directly to national security. The MoD also highlighted that such spending has a multiplier effect on economic growth and job creation.

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With several big-ticket projects at advanced stages of approval, the Ministry is confident of achieving full utilisation of the capital allocation once again by the end of the fiscal year. It is also working on revised budgetary projections for upcoming discussions on revised estimates.

For FY 2025-26, the Rs 1,80,000 crore allocation under the capital head marked a 12.66% increase over the actual expenditure in FY 2024-25. The Ministry continues to prioritise domestic procurement, having earmarked Rs 1,11,544.83 crore for the Indian defence industry, including MSMEs and start-ups. Of this amount, around 45% has already been spent by September 2025.

The initiative aligns with the government’s vision of promoting Aatmanirbharta (self-reliance) in defence technology and manufacturing. Over the past five years, the capital outlay for the Armed Services has increased by approximately 60%, reflecting a consistent focus on capacity building and indigenous production.