New Tech, New Tenacity, Old Tensions?
A Brief Assessment of The 2026 Parliamentary Defence Standing Committee Reports
Authors
On March 18, 2026, the Parliamentary Standing Committee on Defence for the 18th Lok Sabha released its recommendation reports on the Union Government’s Demands for Grants Nos. 19, 20, 21 and 22, which pertain to the defence budget. For FY 2026-27, the reports lay down interesting recommendations for the Government to imbibe (or discard) based on the future trajectory of India’s military modernisation and defence spending, as envisioned by the Standing Committee. Some of these recommendations are new and bold, while others are reiterations of what previous reports from the Defence Standing Committees of the 15th, 16th and 17th Lok Sabhas have already conveyed in some sense or another.
The recommendations that are new in 2026, revolve around the push for the incorporation for emerging and critical technologies in defence. First, for example, the Committee strongly recommends using AI to modernise older Defence Public Sector Undertakings (DPSUs). They note that AI facilitates faster decision-making, reduces personnel risk, and fundamentally shifts warfare toward “intelligence automated systems.” In general, the Committee emphasised that the Defence Ministry must ensure that organisationally and culturally, DPSUs transform into more technologically front-footed institutions. In fact, while combatting encroachment of defence lands using GIS mapping and satellite imagery in coordination with local civil authorities has been a regular feature of the reports’ recommendations, AI-based surveillance is something the Committee specifically highlights in 2026.
Second, and more important, is that the Committee recommended the creation of a separate budget head for “Critical & Latest Technology”. It argued that to ensure that funding constraints do not impede modernisation, a completely new structural mechanism should be adopted, especially to foster &D specifically for critical and emerging technologies in defence. Such a proposal is directly tied to the need for indigenous research in advanced areas like glide missile technology, which the Committee specifically recommends, but also autonomous drones or jet engines, which continue to remain “advanced” areas from India’s perspective.
It is noteworthy that publicly available information indicates that the only “separate budget head” mentioned by the Defence PSC in prior years was specific to the Technology Development Fund (TDF), which is a grant system designed to fund MSMEs and startups (limited to Rs. 10 to 50 crore per project).
Before 2026, instead of a dedicated budget head for critical technology, the Committee recommended fixing gaps in indigenous innovation in military technologies by proposing a few other vital ideas, which include, but are not limited to:
A Non-Lapsable Defence Modernisation Fund: It has heavily pushed for a “roll-on” fund so that unspent capital for modernisation would not be returned to the exchequer at the end of the financial year (See: 16th Lok Sabha SC’s 42nd report & 17th Lok Sabha SC’s 36th report).
Overall Budget Percentage Increases: It has also advocated for progressively increasing DRDO’s overall budget to eventually reach 10% of the total defence budget (See: 18th Lok Sabha SC’s 4th report).
Earmarking for the Private Sector: It has called on the Government to assign as much as 25% of the defence R&D budget specifically for private companies, startups and academia (See: 17th Lok Sabha SC’s 26th and 43rd reports).
Third, the Committee emphasised that the next 10-year Integrated Capability Development Plan (ICDP) must be in tandem with the changing nature of modern warfare, and focused on automation, velocity, and quick response. Specifically for the ICDP, it recommends focusing on the popular three headers on the nature and types of warfighting capabilities - kinetic, non-kinetic, and hybrid. Further, in recommendation para 5 discussed in the 21st report, to depict an atmosphere of support, it is highlighted:
Keeping in view the need for maintaining credible war deterrence at all times, the Committee recommended that enhanced budgetary allocation, if sought, under Capital Head for modernization purpose at Revised Estimates 2025-26 may be given to ensure state-of-the-art weapons/equipment and logistical support for the Armed Forces.
In terms of three recommendations that echo past reports, the SC called on the Government to:
- Allocate more and not lesser funds for capital expenditure at the RE stage, in a bid to ensure that combat preparedness remains at an optimum level;
- Lay down strict timelines of the technological deliveries of DRDO and all DPSUs, so that products are available to the armed forces at the right time; and
- Facilitate the Ease of Doing Business (EoDB) and aggressively explore new foreign markets for selling Indian defence products.
Finally, which are a few notable recommendations were dropped and find no mention in March 2026 reports, and which were highlighted in the past few years?
One, in 2023 and 2024, across multiple reports, the “Creation of non-lapsable Defence Modernisation Fund” was a permanent fixture on the Committee’s agenda and a subject of intense, repeated deliberation. This is perhaps a most vital recommendation to imbibe for the Government, and perhaps the one that has seen rejection on the largest numbers of accounts. Between 2017 and 2024, the proposal for such a fund has been rejected because: a) The Finance Ministry rejected the idea because the money in such a fund would not be automatically available to the MoD and would still require annual Parliamentary sanction to be spent; b) Moving general revenues out of the Consolidated Fund of India into a parked corpus would unnecessarily idle those funds, making them unavailable for other essential government priorities; c) Moving general revenues into a corpus fund goes against the spirit of Article 266(1) of the Constitution, and that that allowing it for defence could trigger similar competing demands from other Ministries; and d) “there is no need for non-lapsable fund” (See: 17th Lok Sabha SC’s 37th report).
Two, in the 35th report of the 17th Lok Sabha’s SC, a recommendation was made to leave no vacancies in the posts of the Non-Official/Independent Directors in the Boards of DPSUs, as such Directors were considered necessary for corporate governance strengthening, for bringing objectivity to the table, and for balancing the interests of management and stakeholders. Per MoD’s Department of Defence Production, as of October 2025, out of 73 seats for said Independent Directors across 17 DPSUs, 51 remained vacant, while 22 are expected to remain vacant by October 2026. This accountability was also not demanded in the March 2026 SC reports. While the focus on timeliness has remained constant, additional recommendations on DPSUs finding more export markets and using automation in their production lines, have come into play.
Two other sustained recommendations regarding maintenance of a gender balance in armed forces’ intake ratios from Sainik Schools, as well as management of the affairs of cantonment areas (especially elections therein and the resolution of civilian complaints regarding thoroughfare), too, find no mention in 2026.
Disclaimer: It is highly likely that the articulation and internal submission of these recommendations would have happened way before 18 March 2026. Some of the language (for example, “RE 2025-26” in recommendation para 5 in the 21st report), indicates that unlike this is a mistake, discussions predate RE stage for last FY. Of course, some of these recommendations have not been incorporated in thr FY 2026-27 Union Budget announced on 1 February 2026, which is also notable.