Defence ministry utilises over 50% of FY26 capital outlay by September

The Ministry of Defence (MoD) has utilised more than half of its total capital outlay for the ongoing financial year 2025-26 by the end of September.

According to an official statement, the ministry’s capital expenditure stood at ₹92,211.44 crore, amounting to 51.23% of the total budgeted allocation of ₹1.8 lakh crore for the current fiscal. In the previous financial year, the ministry had achieved full utilisation of its capital budget of ₹1,59,768.40 crore.

“The utilisation of over 50% of the capital outlay ensures timely delivery of vital platforms such as aircraft, ships, submarines, weapon systems, etc. required for the modernisation of the Armed Forces in the coming year,” the statement said.

A majority of the expenditure so far has gone towards aircraft and aero engines, followed by land systems, electronic warfare equipment, armaments, and projectiles, the ministry noted.

Capital expenditure in defence is used to fund the acquisition of new assets, research and development, and infrastructure development in border areas.

The ministry added that such expenditure also has a “multiplier effect on economic growth and employment generation.”

With several big-ticket projects nearing approval, the defence ministry expressed confidence that it would fully utilise the allocated capital outlay by the end of the current fiscal. It is also preparing budgetary projections for the revised estimates later in the year.

The defence ministry’s capital budget was 12.66% higher for FY26 than the actual expenditure in FY25.

Since FY21, the ministry has been earmarking funds for procurement from domestic industries to promote self-reliance under the Aatmanirbhar Bharat initiative. For FY26, ₹1,11,544.83 crore has been set aside for procurement from Indian vendors, of which 45% has already been spent.

“This allocation is aimed to boost Aatmanirbharta in defence technology & manufacturing and to attract MSMEs, start-ups, etc. in the sector. Allocation under capital outlay for Services has shown a rising trend over the past several years,” it said.