BEL and Mazagon Shares: On February 1, 2025, India’s Finance Minister, Nirmala Sitharaman, announced the Union Budget for the fiscal year 2025-26. The defense sector received an allocation of ₹6.81 lakh crore, marking a 9.5% increase from the previous year’s ₹6.22 lakh crore.
GRSE and Apollo Micro Systems Join Hands for Advanced Defence Solutions
This budget is divided into two main parts:
- Revenue expenditure
- Capital expenditure
Revenue expenditure, which covers daily operations and salaries, is set at ₹4.88 lakh crore. This includes ₹1.60 lakh crore dedicated to defense pensions.
Capital expenditure, aimed at modernizing the military, is allocated ₹1.92 lakh crore. This fund will be used to purchase new weapons, aircraft, warships, and other military equipment. Notably, ₹48,614 crore is designated for aircraft and aero engines, while ₹24,390 crore is allocated for the naval fleet.
The Defense Research and Development Organisation (DRDO) will receive ₹26,816.82 crore, a 12.41% increase from the previous year. Of this, ₹14,923.82 crore is earmarked for capital expenses and research projects.
Budget 2025: A Decade of Defence Budgets Under Modi Government 2014-2024
Despite the overall increase, some experts believe the budget may still fall short in addressing India’s strategic needs, especially given regional security challenges. A significant portion of the budget is allocated to pensions and salaries, potentially limiting funds available for new military acquisitions.
According to ET Now, after the announcement of budget 2025 shares of Hindustan Aeronautics Limited and Bharat Dynamics saw a 5% decline. Analysts suggest this drop is due to the modest increase in the defense budget, which may not meet market expectations for substantial defense spending.
