Former Finance Secretary Subhas C. Garg Raises Alarm on India's Defence Spending

The Union government paid Rs 361.31 billion in 2025-2026 'for spectrum charges payable to its own telecommunication department — an expense not levied earlier, since defence spectrum was free'

The Wire Staff

The Union government paid Rs 361.31 billion in 2025-2026 'for spectrum charges payable to its own telecommunication department — an expense not levied earlier, since defence spectrum was free'

former finance secretary subhas c garg raises alarm on india s defence spending

Subhash Chandra Garg. Photo: PTI

New Delhi: In an opinion article published by Deccan Herald, former finance and economic affairs secretary Subhash Chandra Garg has raised questions about India's spending on the defence preparedness at a time of great geopolitical turmoil in the world. While the expenditure looks large at face value, he has argued, the "real investment in lethal capacities remains inadequate".

While the budgetary allocation for defence has increased, the fine print shows that this increased spending is not actually being used in ways that will enhance India's defence capabilities. The 'real' defence expenditure, excluding pensions, rose by about 18% between 2024-25 and 2025-26. Coming as this was in the aftermath of Operation Sindoor, experts had said at the time that a larger increase was expected.

Garg's article, however, now says that the "effective increase in defence spending was barely 10% — far too inadequate given the worsening regional security scenario". This calculation, Garg points out, is because the Union government paid Rs 361.31 billion in 2025-2026 "for spectrum charges payable to its own telecommunication department — an expense not levied earlier, since defence spectrum was free". This transfer to the telecom department cannot be seen as increasing India's defence capabilities, since it was payment for a previously free essential.

Garg also questioned why a separate allocation of "Rs 316.31 billion in Budget 2025-2026 and Rs 98 billion in Budget 2026-2027 (a combined Rs 414.3 billion or ~$4.6 billion) under the Transfer to Technology in National Security Fund (TNSF) in the Finance Ministry (Department of Economic Affairs) budget — possibly linked to the S-400 system" was kept outside of the defence budget and instead listed under a separate fund. He asked whether this might reflect a "not so transparent practice" in India's procurement of Russian defence goods.

The former finance secretary also highlighted the delays in developing indigenous capabilities, like the lack of progress on the Kaveri aero-engine, and the ongoing delays in Tejas deliveries.

This article went live on March eleventh, two thousand twenty six, at sixteen minutes past one in the afternoon.

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