India Expected to Increase Defence Spending

29 February 2008 (Last Updated February 29th, 2008 07:10)

The Indian Government is expected to announce an increase in defence spending of eight to ten percent in its budget this week. India increased its defence budget by 7.8 percent to US$22bn last year, but failed to spend around 70 percent of its US$10bn allocation for capital outlay becau

The Indian Government is expected to announce an increase in defence spending of eight to ten percent in its budget this week.

India increased its defence budget by 7.8 percent to US$22bn last year, but failed to spend around 70 percent of its US$10bn allocation for capital outlay because of red tape, Reuters reports.

According to a senior defence official, the government is likely to present a budget focussed on health and job creation ahead of elections.

"We expect the defence allocation to be in line with inflation and will not be surprised if it is lower than ten percent," he says.

India's military, the fourth largest in the world, is undergoing a slow modernisation process.

The government is working on of its biggest ever arms deals – a US$10bn purchase of 126 fighter jets.

India spends around 2.5 percent of its GDP on the military.

By Elizabeth Clifford-Marsh