Allocation for defence increased by 5.6% in the Union Budget 2017–18. Finance Minister Arun Jaitley allocated Rs 2,74,114 crore for defence which represents a 5.6% increase over the revised estimates of the present year. Defence pension is not part of this allocation. This accounts for 12.77% of the total allocation of the central government expenditure of Rs 21,46,735 crore for 2017–18. Of this, Rs 1,82,534.42 crore is for revenue expenditure and Rs 91.579.7 crore capital expenditure. Of the capital allocation, meant for new purchases, the services get Rs 6,488 crore, a 10% hike from this year's allocation of Rs 78,586.68 crore.

The Budget allocation for last year was Rs 2,58,589.32 crore which was revised to Rs 2,59,480.13 crore. The capital allocation for the defence services this year was Rs 78,587 crore of which Rs 71,700 crore had been spent by the ministry leaving Rs 6,886 crore unspent.

Adding pensions to the allocation, the Indian defence spend for 2017-18 would be Rs 3,59,854 crore. It is 5.5% more than the budget allocation for this year and 4.2% more compared to the revised estimate for 2016-17.

The amount earmarked for pensions is Rs 85,740 crore. With One Rank One Pension (OROP) having been implemented last year and a separate allocation made for the arrears, the pension has remained largely same as that of last year.

The FM addressed some of the long-standing concerns of the armed forces in his speech. He announced a comprehensive web- based interactive pension disbursement system for defence pensioners as well as a centralised defence travel system for the personnel to book train tickets online.

The pension disbursement system to be established will receive pension proposals and make payments centrally.