As of September end in FY 2025-26, the Ministry of Defence (MoD) has utilized over 50% of its capital outlay, amounting to Rs 92,211.44 crore (51.23%) out of a total allocation of Rs 1,80,000 crore. In comparison, the MoD utilized 100% of capital expenditure in the last financial year, totaling Rs 1,59,768.40 crore.
The expenditure is directed towards vital platforms like Aircraft, Ships, Submarines, and weapon systems to modernize the Armed Forces, focusing on aircraft and aero engines, land systems, and electronic warfare equipment. The allocation of Rs 1,80,000 crore represents a 12.66% increase over the actual expenditure of FY 2024-25.
For FY 2025-26, Rs 1,11,544.83 crore has been earmarked for domestic industries, with 45% of these funds already expended. Allocation under capital outlay for Services has increased by approximately 60% over the last five years. This is intended to promote domestic defense manufacturing and attract MSMEs and startups.
Release ID: 2178641
Posted on: 13 OCT 2025 7:48PM by PIB Delhi
Key Entities Referenced
Ministry of Defence (MoD): The central entity responsible for utilizing capital outlay, specifically referenced for its expenditure progress in FY 2025-26.
FY 2025-26: The financial year which is the primary subject of the capital outlay utilisation.
Aatmanirbharta: Mentioned in the context of boosting defence technology & manufacturing through capital outlay allocation.
Ministry of Defence
MoD utilises over 50% of total FY 2025-26 capital
outlay by September end
Posted On: 13 OCT 2025 7:48PM by PIB Delhi
In the current Financial Year (FY) 2025-26, Ministry of Defence (MoD) has utilised more than 50% of capital
outlay by the end of September 2025. In absolute terms, the capital expenditure stands at Rs 92,211.44 crore
(51.23%) out of the total allocation of Rs 1,80,000 crore. The MoD had utilised 100% of capital expenditure
amounting to Rs.1,59,768.40 crore in the last financial year.
The utilisation of over 50% of capital outlay will result in ensuring timely delivery of vital platforms such as
Aircraft, Ships, Submarines, weapon system, etc. required for the modernisation of the Armed Forces in the
coming year. Majority of the expenditure has been on aircraft and aero engines followed by land systems,
electronic warfare equipment, armaments, and projectiles. Capital expenditure is crucial for the defence sector
as it funds the acquisition of new assets, research & development, and infrastructural development in the
border areas, which are all essential for the country's national security. Moreover, capital expenditure has a
multiplier effect on economic growth and employment generation.
With this pace of expenditure and big-ticket projects which are at advanced stages of approval, MoD is
committed to fully utilising the allocation under capital head by the end of the current FY also. In parallel, the
Ministry is working on the budgetary projections to be discussed for revised estimates. It is to be highlighted
that in the current FY, Ministry of Defence had been allocated Rs 1,80,000 crore under capital head at the BE
stage by Ministry of Finance. This allocation was 12.66% higher than the actual expenditure of FY 2024-25.
Since FY 2020-21, Ministry of Defence has been consistently strengthening the domestic industries by
earmarking funds for procurement from them. For FY 2025-26, Rs 1,11,544.83 crore has been earmarked for
the domestic industry. Significant expenditure to the extent of 45% has been recorded till date out of the funds
earmarked for domestic procurement. 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 has increased by approx. 60% during the last
five years.
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VK/SR/Savvy
(Release ID: 2178641)