Budget proposes hike in Defence outlay by 17.9%

The government will hike defence spending to Rs 770 billion for 2004-05 as compared to Rs 653 billion in 2003-04, an increase of 17.91%.

The Government will hike defence spending by 17.91 per cent to Rs 770 billion ($16.73 billion) for the financial year ending March 2005, Finance Minister P Chidambaram announced on Thursday.

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Chidambaram said the increase had become "necessary" because of low hikes in defence spending in previous years and because of a massive acquisition programme planned by the armed forces.

The hike in the military allocation from the Rs 653 billion the previous year included increased capital expenditure, from Rs 209.53 billion in 2004 to Rs 334.03 billion in the current fiscal year.