Defence budget hiked by 23%

NEW DELHI: Expressing determination to eliminate "all delays" in modernisation of the armed forces, Government today hiked the defence budget by a whopping 23 per cent to Rs 77,000 crores as against revised estimates of Rs 63,000 crores, but did away with NDA regime''s proposal to have a three year non-lapseable revolving fund.

The Government more than doubled the allocation for capital outlay to Rs 33,482 crores from last year''s revised estimates of Rs 16,906 crores with Prime Minister Manmohan Singh saying that defence expenditure had been neglected over the past three to four years.

Increasing the defence outlay in the Union Budget 2004-05, Finance Minister P Chidambaram said it had become "necessary" to make a higher allocation this year to keep up the trend of acquisition of state-of-the-art weapons.

With the doubling of capital outlay, it appears the Government would go ahead with pending proposals to acquire French killer class Scorpene submarines, 125 multi-purpose fighters for the Air Force to replace ageing Mig-21''s and with about Rs 4,000 crore project to increase the firepower of the infantry.

Despite a hefty hike, India''s defence expenditure still forms only 2.5 per cent of the GDP, much lower than China which spends 6 per cent and Pakistan 5.5 per cent of their GDP on defence.