New Delhi, Feb 16: Prime Minister Narendra Modi stressed the need for comprehensive defence modernisation, asserting that the government has a duty to strengthen the armed forces in line with “current realities”, as reflected in the enhanced allocation in the Union Budget 2026.

In an interview with Press Trust of India (PTI) published on Sunday, the Prime Minister said the Budget signals India’s preparedness to transition into a developed nation.

“India has to be strong and prepared at all times, and that is what we are doing. This year's budget reflects India's yearning to become a developed nation. The Budget is not a ‘now or never’ moment born out of compulsion, but a ‘we are ready’ moment born out of preparation and inspiration,” he said.

Capital Outlay Jumps 28% to Strengthen Modernisation Drive

As per Budget 2026, the government raised the overall defence outlay to Rs 7.85 lakh crore for the current financial year, up from Rs 6.81 lakh crore in the previous year - a hike of nearly 15 per cent.

A major highlight is the sharp rise in defence capital expenditure, which increased by 28 per cent to Rs 2.31 lakh crore, compared to Rs 1.80 lakh crore last year. The higher capital allocation underscores the government’s focus on procuring advanced weapon systems and boosting indigenous defence manufacturing.

In January, India approved a Rs 3.25 lakh crore agreement with France to procure 114 Rafale fighter jets, marking one of the largest combat aircraft acquisitions in the country’s history.

Reiterating his commitment to national security, the Prime Minister said the government will “do whatever it takes to support the country's defence forces and strengthen them”, adding that modernisation is essential to ensure readiness amid evolving geopolitical and security challenges.

Government data show that total defence expenditure has risen from Rs 2.94 lakh crore in 2015-16 to Rs 7.85 lakh crore in 2025-26, while capital expenditure for modernisation has grown from Rs 83,614 crore to Rs 2.31 lakh crore during the same period.

FTAs, Private Investment and Digital Push Key to ‘Viksit Bharat’

On economic policy, PM Modi said stronger manufacturing, services and MSMEs have enabled India to negotiate Free Trade Agreements (FTAs) from a position of strength with 38 nations.

“Our FTAs are designed to expand market access for MSMEs in textile, leather, chemicals, handicrafts, gems and other sectors,” he said.

Taking a swipe at the previous United Progressive Alliance (UPA) government, he alleged that economic mismanagement had weakened India’s negotiating capacity. “During UPA rule, talks would begin and then break down; little real substance was achieved despite long negotiations,” he said.

Calling reform a core commitment of his government, PM Modi said the private sector will play a decisive role in driving the next phase of economic transformation. He urged industry leaders to move beyond protecting margins and invest aggressively in research and development, supply chains and quality.

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“The next leap to Viksit Bharat will depend on bold investment by the private sector in innovation, long-term capacity and global competitiveness,” he said, adding that productivity gains must be shared fairly with workers.

Highlighting India’s digital progress, the Prime Minister described the country as a global leader, enabled by reforms such as the UPI platform, and said expanding computing power and data centre infrastructure will lay the foundation for a thriving AI ecosystem and act as a major job creator for the youth.