Despite a steep increase in defence spending this year, one of India's highest during peacetime, the new Congress-led government believes the armed forces would be short of funds within months thanks to a big-ticket weapons modernisation programme.
The country's annual defence budget for the fiscal year ending March 2005 was increased by nearly 18 per cent last week from an interim figure of 653 billion rupees (HK$110 billion) to 770 billion rupees.
Of this sum, 335 billion rupees will be used for purchasing new weapon systems, nearly 60 per cent up from last year's 210 billion rupees.
Nevertheless, Defence Minister Pranab Mukherjee said last week that the funds were not enough to pay for all the new hardware and that he would soon seek further allocations.
'Almost from the month of October onwards, we will be short of funds,' he said.
Predictably, Pakistan reacted warily to India's huge defence allocation.
Pakistan Information Minister Sheikh Rashid Ahmed expressed concern over the decision and said Pakistan would 'make every possible effort to check any move to disturb the balance of power in the region'.
