ISLAMABAD, July 8: Pakistan has said that the "unusual" increase in India's defence budget is not a matter of concern and that it is obliged to upgrade its capabilities to address the existing asymmetry in the conventional field.

"It is not a matter of concern, but we are vigilant and we have to read these trend-lines very carefully," Foreign Office spokesman Masood Khan said. India's budget for 2004-05 proposed an allocation of Rs770 billion for defence sector against the revised budget allocation of Rs603 billion during the fiscal 2003-04, denoting a massive increase of 27.69 per cent.

Mr Khan said after maintaining a freeze on its defence budget for years, Pakistan had increased it modestly this year. "Our defence is strong and our capabilities competitive."

But, the spokesman added, the existing asymmetry in the conventional field had to be addressed. "We are, therefore, obliged to upgrade our capabilities, both quantitatively and qualitatively," the spokesman added.

Mr Khan termed the increase in India's defence budget unusual and said it came shortly after the commencement of the composite dialogue, adding that it had been the trend for the past five years.

In the immediate context, he said, India was normalizing its relations with China. Similarly, Pakistan and India were pursuing the twin tracks of confidence-building and dialogue to bring peace, security and prosperity to the region, he added.

The spokesman said an upward spiral in defence spending accelerated arms race in the region, symmetrically or asymmetrically, voluntarily or involuntarily. "We need massive resources elsewhere - for poverty alleviation, job creations, health, education, and social development," he added. -APP