ISLAMABAD, July 9: Information Minister Sheikh Rashid Ahmed on Friday termed the increase in Indian defence budget unnecessary and reiterated that Pakistan would not engage in an arms race.

Reading an official statement to newsmen at the Pakistan Television headquarters, the minister said: "We are not afraid of the increase in Indian defence budget, however, are quite concerned and unable to understand what has prompted our neighbouring country to give its defence budget such an unprecedented increase, because at present India has good relations with both Pakistan and China."

He reiterated Pakistan's stance not to engage in an arms race but said it would take every possible measure to meet its defence requirements and maintain a strategic balance. He referred to a statement given by President Gen Pervez Musharraf that Pakistan would continue to develop its missile technology and conduct more missile tests soon.

In response to a question, the minister said Pakistan had informed the United Nations about the ongoing fencing of the Line of Control by India. He termed it a violation of international law.

"We want to resolve all our outstanding issues, including the Kashmir dispute, with India through negotiations and hope to get the same response from the other side," he said in reply to a question. He denied allegations that state machinery was being used in Finance Minister Shaukat Aziz's election campaign.

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