Defence Minister Rajnath Singh during a meeting on the approval of enhanced Financial Powers for Revenue-related Procurement having an annual value of more than ₹1.25 Lakh crore under the new delegation of financial powers
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In a major move to reduce bureaucratic delays and boost military readiness, commanders across the Army, Navy and Air Force have been given increased financial autonomy to fast-track annually more than ₹1.25 lakh crore worth central defence revenue procurement.The Ministry of Defence (MoD) has radically streamlined its procurement architecture. Under the revised Delegation of Financial Powers for the Defence Services (DFPDS) rules unveiled by Defence Minister Rajnath Singh on Thursday, financial limits for the armed forces have been raised by up to 100 per cent, and more than doubled in select cases.The reform ensures that a striking 80 to 90 per cent of contracts can now be cleared directly by the services, bypassing the Ministry entirely. This is the first update to the delegation framework since 2021.For the MoD, revenue procurement covers the recurring expenses, inventory and services essential for the daily operations and sustenance of the armed forces. Crucially, this decentralisation of power does not extend to capital procurement, which governs the acquisition of high-value, long-term strategic assets designed to build or upgrade core military capabilities.Financial powersIn addition to the spike in spending ceiling, there is an overall delegation of special financial powers to tri-services commanders for urgent operational requirements, the MoD said.Sources privy to the development said in the case of the Army, financial powers of the Vice Chief has been increased from the existing ₹500 crore annually to ₹750 crore in case of indigenous procurement. It has been increased from ₹275 crore to ₹500 crore in case of acquisition from foreign vendors or government-to-government deals.Likewise, powers of Master General Sustenance (MGS), headed by a Lt General level officer, has gone up from ₹350 crore to ₹500 crore annually for indigenous procurement. Additionally, it has jumped from ₹125 crore to ₹225 crore for foreign purchases.Financial autonomyThe restructuring will lead to greater financial autonomy for Additional Director Generals in the MGS branch. They can now take decisions for buying indigenous projects valued at ₹270 crore, up from the exiting cap of ₹150 crore. In case of contracting from abroad, they can sign on orders now worth ₹180 crore, which is way beyond the existing ₹100 crore cap.Many new competent financial authorities have been introduced to decentralise the procurement of goods and services. For instance, Director General Ordnance for the first time has been given financial powers to take decision on projects up to ₹50 crore.Equivalent ranks in two other services of Air Force and Navy will enjoy jacked up powers.The revision, the MoD emphasised, was needed due to the expansion in force level and to cater to the increased expenditure on operations and sustenance vis-à-vis the increase in budgetary allocation.Published on June 4, 2026
