TOI Budget Dialogues 2026: Drones, AI and reforms matter more than numbers in defence budget, say experts

NEW DELHI: The TOI Budget Dialogues 2026 had a series of wide-ranging discussions examining the Union Budget’s implications across key sectors, from economic growth and social development to governance and security. Held under the theme “March Towards Viksit Bharat”, the event brought together policymakers, former officials and domain experts to unpack how Budget 2026 aligns with India’s long-term national priorities. Against this broader backdrop, the spotlight in the fourth panel shifted to national security, with speakers analysing whether Budget 2026 is adequately structured to address India’s evolving defence and strategic challenges. Titled “From Operation to Allocation: What the Budget Means for National Security”, the session was moderated by Anisha Dhawan and featured Lt Gen Raj Shukla (Retd.), PVSM, YSM, SM, and Lt Gen Rakesh Sharma (Retd.), former Adjutant General of the Indian Army.The discussion began with an examination of defence allocations in Budget 2026, particularly the government’s stated 22% increase in capital expenditure and the emphasis on domestic procurement, with 75% of capital outlay earmarked for Indian industry. However, both speakers cautioned against reading the numbers in isolation.Lt Gen Raj Shukla said the real test of the Budget lies in outcomes, not allocations. “Budgets don’t fight wars, capabilities do. The question is not how much money is allocated, but how intelligently and quickly it is converted into operational capability,” he said.Drawing from recent global conflicts, including the Ukraine war, he stressed that future battles will be shaped by technology rather than sheer manpower or legacy platforms. “If we prepare for the last war, we will lose the next one,” Shukla warned, pointing to drones, artificial intelligence, space-based assets and precision weapons as decisive factors.He also flagged structural issues in India’s procurement process, arguing that the focus on the L1 (lowest cost) model often comes at the cost of quality and innovation. “We are still optimising for cost when we should be optimising for lethality, speed and survivability,” he said, adding that delays in decision-making can neutralise even well-intentioned budgetary provisions.Lt Gen Rakesh Sharma offered a more cautious assessment of the defence outlay, highlighting the pressure of committed liabilities. “A large part of the capital budget goes into payments for contracts signed in earlier years. What looks like a big jump on paper often leaves limited headroom for new capability creation,” he noted. Sharma also underlined gaps in intelligence, surveillance and reconnaissance, particularly in space-based assets. “Without real-time situational awareness, even the most advanced platforms are fighting blind,” he said.Both speakers agreed that private sector participation and defence start-ups will be crucial if India is to meet its long-term security goals. Shukla remarked that industry needs predictability and trust from the government. “If we want Indian companies to take risks and innovate, we must give them long-term assurance, not stop-start policies,” he said.The panel also touched upon air defence, missile systems and homeland security, with Sharma stressing the need to rebalance spending. “We are still investing heavily in legacy systems. The future lies in integration—air, land, sea, cyber and space working as one,” he said.The discussion concluded with a consensus that Budget 2026 provides a window of opportunity to reshape India’s national security architecture. However, as Shukla summed up, “Money is necessary, but mindset and reform are decisive.” The TOI Budget Dialogues 2026, held in New Delhi under the theme “March Towards Viksit Bharat”, brought together experts and policymakers to decode the broader implications of the Union Budget.