Rs 1.25 Lakh Crore Defence Boost! Rajnath Singh enhances financial powers

Defence Minister Rajnath Singh on Thursday approved a significant enhancement in the financial powers of the armed forces, a move aimed at strengthening operational preparedness, speeding up procurement and boosting indigenous defence manufacturing.

The revised Delegation of Financial Powers for the Defence Services, including medical and works projects, increases several financial limits by up to 100 per cent, with some categories seeing an even higher enhancement.

According to the Defence Ministry, the revised framework will enable faster conclusion of contracts and execution of projects by giving greater autonomy to field commanders.

The government said the enhanced delegation would facilitate procurement worth more than Rs 1.25 lakh crore through the revenue route based on the current year's budgetary allocations.

Push for Aatmanirbhar Bharat and faster procurement

The financial powers delegated for indigenisation and research and development within the military ecosystem have also been doubled. The move is aimed at strengthening the government's Aatmanirbhar Bharat initiative in the defence sector by reducing dependence on foreign original equipment manufacturers.

Special financial powers available to Army, Navy and Air Force commanders for urgent operational requirements have been increased substantially. The total ceiling for such emergency purchases has also been doubled.

The revised norms also introduce new provisions to encourage joint procurement by the three services through a lead service model. Under the new system, the lead service will have higher delegated powers than those available under normal procurement procedures.

The Defence Ministry said several new competent financial authorities have also been created to decentralise the procurement of goods and services across the armed forces.

Revision after five years

The financial powers were last revised in 2021. The latest revision was considered necessary due to the expansion in force levels and rising expenditure on operations and sustenance, along with higher budgetary allocations.

The ministry said the revised delegation, coupled with the updated Defence Procurement Manual notified in October 2025, is expected to accelerate decision-making and ensure timely availability of critical resources for the armed forces.

Five new warships to join Indian Navy

Meanwhile, government-owned defence shipbuilding companies are also likely to remain in focus as the Indian Navy is expected to induct five new warships over the next two months, according to sources.

The five vessels, built at an estimated cost of around Rs 15,000 crore, have been constructed by three state-run shipyards -- Mazagon Dock Shipbuilders Limited, Garden Reach Shipbuilders & Engineers and Cochin Shipyard Limited, said the sources. Read more

Defence manufacturing ecosystem in focus

Market participants believe the latest policy measures and the upcoming induction of new naval assets underline the government's continued focus on strengthening domestic defence capabilities and improving the operational readiness of the armed forces.

Senior officials, including Chief of Defence Staff General NS Raja Subramani, Chief of the Army Staff General Upendra Dwivedi, Chief of the Naval Staff Admiral Krishna Swaminathan and Defence Secretary Rajesh Kumar Singh, were present during the release of the revised financial powers document in New Delhi.