28 February 2005	Monday	18 Muharram 1426

NEW DELHI, Feb 27: India is expected to sharply raise its defence spending in Monday's budget, despite peace talks with Pakistan, as it goes on a shopping spree for new military hardware to update its ageing arsenal, analysts say.

India, one of the world's biggest arms buyers with one million-plus troops, is looking to buy 126 new jet fighters to replace an accident-prone fleet of Russian-built MiGs, six new submarines from France, an anti-missile system from the United States and rocket launchers from Russia.

"India has not seen modernisation over a 10-year period," said Kapil Kak, a former air marshall and director of the Centre for Strategic Studies. "The defence ministry has to balance this and so we think annual spending of 2.75 to three per cent of (India's estimated 650-billion-dollar gross domestic product) over the next 20 years can make up for this serious mistake," he said.

The defence budget rose by almost 18 per cent to 770 billion rupees (17.6 billion dollars) in this fiscal year to March 2005 as India went on spending binge. This made up about 17 per cent of the overall budget.

The country bought the Phalcon radar system from Israel for 1.1 billion dollars, a used aircraft carrier from Russia for 1.5 billion dollars and 66 Hawk jet trainer planes from Britain for 1.45 billion dollars.

"Contractual obligations will need a 25 to 30 per cent additional allocation in the budget but even with this hike, our military spending will be lower, compared to China's 5.5 percent (of GDP) or the US six percent," Kak said. He noted the previous Bharatiya Janata Party-led government ordered billions of dollars in new equipment before losing power in May 2004.

India's defence forces have asked for a 40 per cent increase in spending for the financial year starting April 1, more than 10 times the amount spent on health and education, to pay for new weapons including the Patriot anti-Missile system from the United States, a senior military official said.

"That's unlikely to happen but we're looking at an increase of 25 per cent this fiscal year," the official, who did not want to be identified, said. India says the need to replace old equipment is paramount in defence planners' minds.

"Most of the equipment bought from Russia has reached obsolescence so there's no doubt they have to hike spending substantially," said Rahul Bedi, a New Delhi-based analyst with Jane's Defence Weekly. -AFP