₹7.85 lakh crore Defence Budget signals major push for modernisation, future-ready forces: V.K. Saraswat

“To modernise all the three services of the Defence sector and enhance their future capabilities, the Central Government has allocated ₹7.85 lakh crore to the Ministry of Defence in Union Budget 2026 -27,” said NITI Aayog member V.K. Saraswat. 

Speakihng to The Hindu on the sidelines of a ‘Defence Science Conclave’ organised by a local college in Vijayawada, Mr. Saraswat said the allocation marks a 15.19% increase over the FY 2025 -26 Budget Estimates, and accounts for 14.67% of total Central Government expenditure. “Allocation to DRDO has increased to ₹29,100.25 crore in the current financial year from ₹26,816.82 crore in FY 2025 –26,“ he said.

The distinguished scientist with a vast experience in defence research said the emphasis is on acquiring advanced platforms, cutting-edge technologies and force multipliers. He said the proposal to support States in creating five university townships in the vicinity of industrial and logistics corridors was another major initiative to facilitate training of the youth across multiple research disciplines and align skill development with India’s long-term vision of becoming Viksit Bharat by 2047.

On atomic energy, he said the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025, reflects the government’s effort to modernise the laws governing the nuclear sector.

“It opens the nuclear energy sector to private sector participation for the design, development, manufacturing and large-scale collaboration of nuclear power plants, including small, medium and large modular reactors,” he said, insisting that this shift is critical to achieving India’s target of 100 GW of nuclear power, which cannot be met without the involvement of private sector.

“The idea is to guide the country toward a more advanced and resilient nuclear ecosystem,” he said. 

Referring to deep-tech start-ups, Mr. Saraswat pointed out that technology building blocks are rapidly changing. “Emerging and disruptive technologies such as artificial intelligence, quantum technology, robotics, drones, cyber-physical systems, nanoscience, and nanomaterials will reshape not only defence but also sectors like healthcare, energy, and agriculture,” he said, underscoring the need for integrated, multidisciplinary education and vocational training to ensure these technologies translate into innovative products. 

Highlighting the growing importance of private sector-led research and development, he said historically, less than 20% of India’s R&D funding came from private sources.

“To address this, the Government has launched the Research Development Innovation (RDI) initiative with an outlay of ₹1 lakh crore, aimed at strengthening research, innovation, manufacturing, and the use of advanced technologies while leveraging the country’s skilled youth,” he explained. 

He cited progress in the India Semiconductor Mission (ISM) and said the 2021 semiconductor policy, with an outlay of ₹76,000 crore, has led to the establishment of foundries, VLSI (Very Large Scale Integration) centres and electronic component manufacturing units across India.

“Building on this, the government has launched Semiconductor 2.0, focussing on advanced areas such as compound semiconductors, power electronics, neuromorphic chips, and cutting-edge nodes ranging from 3 nm to 7 nm, alongside quantum-related technologies,” he said.

The former Secretary of Defense Research and Development Organisation (DRDO) underlined the strategic importance of rare earths and critical minerals, which he said are essential for defence systems, satellites, renewable energy technologies, EVs, batteries, and electronics.

“To reduce dependence on imports, India has launched dedicated missions on rare earths and critical minerals,” he informed, adding that given limited domestic reserves, the strategy will involve both exploration within the country and international collaborations, including acquiring mining assets abroad to strengthen supply security.

Published – February 07, 2026 03:27 pm IST