Government to review financial aspects of revised Agnipath scheme

The financial aspects of the recently revised Agnipath recruitment model by the Central Government will be reviewed. Senior officials informed on Thursday that while all Agniveers under this scheme have been assured full-term military service, government expenditure is likely to increase due to higher salaries and future payments of pension and gratuity.

The Centre approved this revised scheme on Wednesday. According to these new rules, Agniveers who fail to be selected after the initial four years of service will have the option to continue serving in uniform for an additional two years with higher salaries. At the end of this extended period, they will also obtain a pathway to enroll as regular soldiers, making them eligible for other benefits including pension, gratuity, and medical and canteen facilities. Subject to specific eligibility criteria and individual consent, all such Agniveers can become permanent after the two-year extended service.

Officials stated regarding this matter that there will be no shortage of funds. One official added, "This expectation of increased expenditure is assumed to be partially offset by savings in training costs. This change in Agnipath will eliminate the need for additional training, thereby reducing costs and keeping expenditure under control. In any event, national security is above financial matters."

According to another official, the financial implications will be reviewed periodically. This decision comes at a time when all three services were set to release 75% of the first batch of Agniveers, and only 25% of Agniveers were to be retained for an additional 15 years under the previous provisions of the Agnipath scheme. Important assembly elections are scheduled to be held in five states early next year, including Uttar Pradesh, Uttarakhand, and Punjab, which have a significant strength in the military.

Chief of Defence Staff General N.S. Raja Subramani, in a joint cabinet briefing with Union Minister Ashwini Vaishnaw, stated that the government's focus is on enhancing the operational capability of the armed forces, meeting organizational requirements, and fulfilling the aspirations of Agniveers. Regarding the budget, he further added, "I only want to say one thing about the budget. As far as the relationship between the Indian defence forces and the government is concerned, there has never been any shortage, and the primary aspect has been the operational capability of the armed forces and the ability of the armed forces to always remain fully prepared. There is no problem there."

A key feature of the original scheme introduced in June 2022 was to manage increasing wage and pension bills. According to a report by Hindustan Times, the government has allocated ₹17,396 crore for the Agnipath scheme in the 2026-27 defence budget, representing a 58% increase from the ₹11,039 crore budget estimate for the financial year 2025-26. In 2024-25, the budget for this scheme for all three services was ₹7,471 crore. According to budget documents, in this year's budget, the share of the army in this scheme is ₹15,173 crore, the navy ₹1,150 crore, and the air force ₹1,072 crore.

The government's pension bill is also steadily increasing. In the 2026-27 defence budget, ₹1.71 lakh crore has been allocated for pensions, which is higher than the ₹1.60 lakh crore budget estimate for the financial year 2025-26. In February, following Operation Sindoor, India increased its defence expenditure by more than 15%, and allocated ₹7.85 lakh crore for this critical sector in the 2026-27 central budget. This included a capital expenditure of ₹2.19 lakh crore to enhance the capability of the armed forces with new weapons and systems, including fighter aircraft, transport aircraft, helicopters, warships, submarines, artillery guns, smart weapons, missiles, rockets, and various unmanned systems. This budget is 14.67% of the government's total expenditure, the highest among ministries.

The Agnipath scheme was launched in June 2022, with the aim of bringing a new model for the recruitment of youth into the armed forces.