Answer

Introduction

Increased defence expenditure without deep-seated reforms in procurement workflows and joint decision-making risks “throwing good money after bad,” leading to cost overruns and obsolete acquisitions. The Union Budget 2026–27, which allocated a record ₹7.85 lakh crore to defence, acknowledges that true strategic outcomes depend on a shift from a manpower-heavy force to a technology-driven, “lean” military through institutionalized reforms like theaterisation.

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Defence Budgets as Catalysts for Economic Growth

• Boosting Domestic Manufacturing: Reserving a massive portion of the capital budget for local firms creates a self-sustaining industrial base.
  Eg: In FY 2026-27, 75% of the capital acquisition budget (approx. ₹1.39 lakh crore) is earmarked for domestic procurement.
• MSME Ecosystem Expansion: Defence orders provide long-term revenue visibility, allowing small-scale engineering firms to scale into global suppliers.
  Eg: The emergence of specialized clusters in the Tamil Nadu and UP Defence Corridors has already led to a projected 15% growth in private contract shares.
• High-Skill Job Creation: Moving from imports to indigenous production (Aatmanirbharta) generates employment in precision engineering, software, and logistics.
  Eg: The expansion of Maintenance, Repair, and Overhaul (MRO) hubs under the new budget is expected to add over 1,00,000 jobs by 2027.
• Export Revenue Generation: A robust budget enables the scaling of production for international markets, turning India into a net security provider.
  Eg: India’s defence exports reached a record ₹23,500 crore in 2025, with a target of ₹50,000 crore by 2029.

Defence Budgets as Catalysts for Technological Advancement

• Fostering Deep-Tech Innovation: Targeted funding for R&D allows the private sector to experiment with high-risk, high-reward technologies like AI and Robotics.
  Eg: The 2026 Budget allocated ₹17,250 crore specifically for Defence R&D, opening funds for private startups for the first time.
• Accelerating Indigenous Aerospace: Sustained funding for aero-engines and fighter programs reduces the critical “propulsion gap” in India’s technology stack.
  Eg: Increased outlays for the Tejas Mk-1A and AMCA programs are driving the domestic development of advanced turbofan technologies.
• Dual-Use Technology Spillovers: Innovations in defence—such as secure communication and materials—often find applications in the civilian commercial sector.
  Eg: Investment in optical fibre-based defence networks is setting the standard for 5G/6G resilience in rural infrastructure.
• Breakthrough in Unmanned Systems: Budgetary support for “Drone Shakti” and AI-enabled air defence (Mission Sudarshan Chakra) is making India a hub for autonomous warfare.
  Eg: Startups like ideaForge are now transitioning from prototypes to mass production of high-altitude tactical UAVs.

Conclusion

For the record ₹7.85 lakh crore to translate into actual combat power, India must streamline its Defence Acquisition Procedure (DAP) to avoid “procedural paralysis.” The budget’s success lies in balancing “modernisation with fiscal discipline.” Ultimately, a well-executed defence budget does not just secure borders; it acts as a “multiplier” that propels India toward a Viksit Bharat by 2047 through industrial and technological sovereignty.

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