Defence Minister Rajnath Singh released the Delegation of Financial Powers to DRDO (DFP-2026) in New Delhi to enhance efficiency, accountability, and timely execution of strategic research and development projects. The new framework significantly expands the financial autonomy of top management within the Defence Research and Development Organisation (DRDO), doubling the sanctioning limits for competitive procurement and new project approvals. This reform is aimed at accelerating the production and induction of indigenous defence technologies into the Armed Forces, reinforcing the government’s Aatmanirbhar Bharat vision.
What Is DFP-2026?
The Delegation of Financial Powers to DRDO (DFP-2026) is an updated administrative framework that governs financial approvals for procurement, project sanctions, and R&D activities within DRDO. It replaces the previous DFP, which was last revised in December 2019. The new framework introduces dedicated financial provisions for trial campaigns, testing and evaluation activities, and authorises the sanctioning of pre-project R&D initiatives. It also clearly separates financial powers for grants-in-aid related to extra-mural research projects, Defence Innovation Accelerator Centres of Excellence, and Technology Development Fund projects.
The core purpose of DFP-2026 is to decentralise decision-making. By pushing financial sanctioning authority down to lower tiers of DRDO’s management, the government aims to reduce the time taken to clear projects, minimise the flow of files to DRDO headquarters in New Delhi, and enable faster responses to the requirements of the armed forces.
Key Financial Enhancements Under the New Framework
The most significant change in DFP-2026 is the sharp increase in financial ceilings across all management levels. The Secretary, Department of Defence R&D, who also serves as Chairman, DRDO, can now sanction competitive procurement and new projects up to ₹150 crore, up from the earlier limit of ₹75 crore. This is a 100% increase.
The Directors General (DGs), who head the seven technology clusters and corporate functions of DRDO, have seen their sanctioning limit raised from ₹25 crore to ₹75 crore. Laboratory Directors, who run DRDO’s network of research facilities across the country, have been empowered from ₹2 crore to ₹5 crore.
In addition to competitive procurement, the framework upgrades limits for single-tender and proprietary procurement. These are cases where only one supplier can meet the requirement, often for specialised or strategic components.
| Authority | Competitive Procurement / New Projects | Single-Tender & Proprietary Procurement |
|---|---|---|
| Secretary, DRDO (Chairman) | ₹150 crore | ₹75 crore |
| Directors General (DGs) | ₹75 crore | ₹37.5 crore |
| Laboratory Directors | ₹5 crore | ₹2.5 crore |
Beyond these numerical enhancements, DFP-2026 introduces structural improvements. It provides dedicated financial provisions for trial campaigns, test and evaluation activities, which were previously bundled under general heads. It also authorises the sanctioning of pre-project R&D initiatives, giving lab directors the flexibility to explore emerging technologies without waiting for full project approvals.
DRDO: The Organisation Behind the Reform
DRDO is the R&D wing of the Ministry of Defence, established in 1958 through the merger of the Technical Development Establishments of the Indian Army, the Directorate of Technical Development and Production, and the Defence Science Organisation. It is headquartered at DRDO Bhawan in New Delhi.
The organisation operates under a dual-hat structure where the Secretary, Department of Defence R&D also serves as the Chairman, DRDO. Currently, Rajesh Kumar Singh holds additional charge of this position. Below the Chairman, the organisation is structured into seven technology clusters, each headed by a Director General (DG). These clusters cover aeronautical systems, missiles and strategic systems, naval systems and materials, armament and combat engineering, electronics and communication systems, microelectronic devices and computational systems, and life sciences.
DRDO runs a network of approximately 52 laboratories and 5 Young Scientist Laboratories (DYSLs) spread across the country, employing around 30,000 personnel including about 5,000 scientists. Its major achievements include the Agni and Prithvi missile series, the Tejas light combat aircraft, the Akash air defence system, the Pinaka multi-barrel rocket launcher, and a wide range of radars and electronic warfare systems.
Part of a Bigger Reform Push
The DFP-2026 for DRDO is the second major financial delegation reform announced by the Ministry of Defence within a month. Earlier in June 2026, Rajnath Singh had released the revised Delegation of Financial Powers for Defence Services (DFPDS-2026), which doubled the financial ceilings for field commanders across the Army, Navy, and Air Force. That reform empowered service chiefs and field commanders to clear revenue procurement worth more than ₹1.25 lakh crore annually at their own level.
DFP-2026 follows a similar trajectory of decentralisation for the R&D ecosystem. The previous revision for DRDO was carried out in December 2019, and before that in June 2018 by the then Defence Minister Nirmala Sitharaman. The 2018 revision had doubled the Secretary’s powers from ₹75 crore to ₹150 crore as well, but for the DGs, the increase was from ₹50 crore to ₹75 crore. The 2019 revision refined these provisions further.
The latest framework goes beyond mere numerical increases. It introduces structural agility by creating dedicated financial heads for field testing, startup engagement through Defence Innovation Accelerator Centres of Excellence, and extra-mural research projects where DRDO funds external academic and industry partners. These provisions align with the broader goal of integrating private industry, startups, and academia into the defence innovation ecosystem.
Significance for India’s Defence Preparedness
The enhanced financial autonomy granted to DRDO addresses a longstanding criticism about over-centralisation in India’s defence R&D apparatus. For years, even routine procurement decisions required clearance from DRDO headquarters, causing delays in project execution and slowing the induction of critical technologies. By empowering DGs and Lab Directors with higher sanctioning limits, DFP-2026 reduces the administrative distance between a laboratory’s technical need and the financial approval required to meet it.
The framework also facilitates faster collaboration with external partners. Dedicated provisions for extra-mural research and the Technology Development Fund allow DRDO to fund projects at universities, startups, and private industry more efficiently. This is expected to strengthen the defence innovation ecosystem under the Aatmanirbhar Bharat mission.
However, some experts have noted that these financial powers remain subject to the availability of funds and compliance with existing expenditure rules. The reform is seen as an enabling mechanism rather than a standalone solution. Combined with the revised Defence Procurement Manual (2025) and the broader DFPDS-2026 for the armed forces, the DFP-2026 forms part of a comprehensive overhaul of how the Ministry of Defence manages its financial resources.
Key Takeaways
- Defence Minister Rajnath Singh released the Delegation of Financial Powers to DRDO (DFP-2026) on 29 June 2026 in New Delhi, replacing the previous framework from December 2019.
- The Secretary, Department of Defence R&D and Chairman DRDO can now sanction competitive procurement up to ₹150 crore, doubled from the earlier limit of ₹75 crore.
- Directors General (DGs) of DRDO have seen their sanctioning limit increase from ₹25 crore to ₹75 crore, while Laboratory Directors have been empowered from ₹2 crore to ₹5 crore.
- Single-tender and proprietary procurement limits have been revised: Secretary up to ₹75 crore, DGs up to ₹37.5 crore, and Lab Directors up to ₹2.5 crore.
- DRDO was established in 1958, operates under the Ministry of Defence, and is headquartered at DRDO Bhawan, New Delhi, with a network of around 52 laboratories.
- DFP-2026 follows the earlier DFPDS-2026 for the Armed Forces released in June 2026, forming part of a comprehensive push to decentralise financial powers across the defence ecosystem.
