Making a detailed presentation before the Parliamentary Standing Committee on Defence recently, top officials of the Defence Ministry said there is "no surplus land" and certain land has been kept vacant for "operational reasons".
It said the three armed services have projected requirement for additional land.
The officials said camping grounds and abandoned airfields are being used for mobilisation and training, and some have been kept for "future use".
The Railways had recently asked the Defence Ministry to provide some land in Meerut and Ambala cantonments for its Dedicated Freight Corridor.
The Airports Authority of India is also pursuing the matter of securing adequate land from the Defence Ministry near Lohegaon airport to develop a dedicated air cargo facility.
The project, which has been talked about for some time now, is critical to facilitate movement of international cargo from the airport. This, in turn, will offer a better prospect of drawing foreign airlines to start their flight operations from Pune.
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Several state governments are holding protracted discussions with the Defence Ministry over sharing and usage of military land.
The Ministry is in possession of a total of 17.54 lakh acres of land, out of which 15.96 lakh is outside cantonment areas and the rest under 62 cantonments spread across India.
In its presentation on 'management of defence land', the Ministry said that about 12,000 acre of its 17.54 lakh acre land are encroached.
Elaborating on the encroachment pattern, the Ministry said 92.5 per cent of its encroached land was under illegal possession for over 20 years.
The ministry said fencing of vacant land, developing isolated plots and regular inspection were some of the measures it was taking to protect its asset against encroachment.