Govt raises defence spending by 7 per cent

The Govt announced a whopping outlay of Rs 89,000 crore for defence in fiscal 2006-07.

The government announced a whopping outlay of Rs 89,000 crore (Rs 890 billion, about $20 billion) for defence in fiscal 2006-07, with Rs 37,458 crore (Rs 374.6 billion) earmarked for new arms purchases.

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Finance Minister P Chidambaram told parliament that he was increasing the allocation for defence from Rs 83,000 crore (Rs 830 billion) in the current fiscal in view of the enhanced expenditure on the modernization of the armed forces.