Government on Monday raised the defence budget by 11.6% to Rs 164,415 crore for 2011-12 from Rs 1,47,344 crore in 2010 to modernise the armed forces.
To procure modern weapon systems and defence equipment, Rs 69,199 crore has been allocated for capital expenditure, finance minister Pranab Mukherjee informed the Lok Sabha while presenting the Budget.
"Needless to say, any further requirement for the country's defence would be met," he said.
The Rs 8366 crore hike in capital expenditure, which is 12% more than last year's Rs 60,833 crore, comes at a time when the Government is looking to finalise big ticket deals to procure 126 multi-role combat aircraft, 197 light helicopter and the 145 Ultra-light Howitzers for the Army.
Of the total budgetary allocation for 2010-11, the Army has been granted Rs 64,251 crore, Navy Rs 10,589 crore, Air Force Rs 15,928 crore and DRDO Rs 5,624 crore.
From the Rs 69,199 crore capital outlay, the Army got Rs 18,986 crore, Navy Rs 5,688 crore, Naval Fleet Rs 7,320 crore and Air Force Rs 30,699 crore.
Commenting on the allocation, minister of State for Defence M M Pallam Raju told reporters that its was a "substantial" increase for his ministry in view of the Rs 69,919 crore capital outlay.
"This is a substantial increase," he told reporters when asked if the budget for his ministry was on expected lines.