Declaring that there would be no shortage of funds for defence preparedness, the government on Friday allocated Rs 65,300 crore (Rs 653 billion) for defence for fiscal 2003-04, representing a 14 per cent hike over the current year's revised estimates figure of Rs 56,000 crore (Rs 560 billion).

Presenting the Union Budget for 2003-04, Finance Minister Jaswant Singh said the government was committed to modernising the armed forces and equipping them with the best available weapons and affirmed, "this is non-negotiable."

However, in real terms the allocation marks only a marginal Rs 300 crore (Rs 3 billion) increase over the 2002-03 budget estimates of Rs 65,000 crore (Rs 650 billion).

While, still to take a final decision on the defence ministry's proposal to evolve a three-year revolving Budget to facilitate armament purchases, the government, as a gesture, has apparently agreed to the carrying over of Rs 9,000 crore (Rs 90 billion) of unspent funds from the 2002-03 Budget.

The allocation for the year works out to about 2.4 per cent of the GDP, making India one of the lowest spenders on defence in the region with Pakistan's defence spending  touching 4.6 per cent of GDP.

For the first time, as a measure to bring greater transparency, the government has created separate Budget heads for the capital outlay as well as Defence Research and Development Organisation.

PTI