NEW DELHI: Seeking to give military commanders greater financial autonomy and speed up procurement decisions, the defence ministry on Thursday revised the financial powers delegated to the armed forces, increasing spending limits by 100% or more than double across a range of categories including, operational procurements, medical and works projects, indigenisation and research and development (R&D) activities.
Defence Minister Rajnath Singh released the newly updated Delegation of Financial Powers for Defence Services (DFPDS 2026), which governs revenue procurement, including medical and works projects. It is the first revision of the DFPDS since 2021.
“This would further strengthen the operational efficiency of field commanders and lead to faster conclusion of contracts and execution of projects,” the ministry said in a statement.
The government said the revised framework would facilitate procurement worth over Rs 1.25 lakh crore through the revenue route. The amount has already been provided for in the armed forces’ revenue budget for the current financial year and does not constitute fresh allocations.
The revision comes at a time when the armed forces are seeking to shorten procurement cycles for emerging capabilities such as drones, counter-drone systems, loitering munitions and electronic warfare equipment, which often need to be acquired and fielded at a much faster pace than traditional military platforms.
Financial powers for indigenisation and R&D have also been doubled, giving the armed forces greater flexibility to support indigenous programmes and reduce dependence on overseas suppliers.
The latest revision follows a series of changes to the military’s financial delegation framework. After a comprehensive review in 2016, the financial powers of the Vice Chiefs of the Army, Navy and Air Force were increased five-fold in 2018, with an overall ceiling of Rs 500 crore.
The DFPDS-2021 subsequently widened delegated powers across a broader range of Competent Financial Authorities and field formations, while also tripling powers related to indigenisation and R&D. The latest revision further raises spending limits across multiple categories, though the ministry has not yet disclosed the revised ceilings for different authorities.
The ministry said special financial powers available to commanders of the three services for urgent operational requirements have been increased significantly, with the overall ceiling under this category raised by 100 per cent.
Apart from raising financial limits, the new DFPDS introduces provisions for joint-service procurement through a lead service and creates several new Competent Financial Authorities, allowing a larger number of procurement decisions to be taken at lower levels.
The role of Integrated Financial Advisers (IFAs), whose concurrence is required for procurements above prescribed thresholds, remains unchanged. While higher spending powers have been delegated to military authorities, the existing system of financial oversight remains in place.
The ministry said the revision was necessitated by the expansion in force levels and increased expenditure on operations and sustenance.
It follows the revised Defence Procurement Manual (DPM) notified in September last year, the first comprehensive overhaul of the procurement framework since 2009. The updated manual seeks to reduce procedural delays and facilitate greater private sector participation in defence procurement.
