India Increases Defense Spending by 11.6 Per Cent to Counter Military Inflation

(Indiadefense) : India increased annual defence spending by about 11.6 percent on Monday, aiming to overhaul the military to counter the military inflation and strategic threats posed by China's rapidly expanding offensive military capabilities. The increase suggests the government plans to move ahead with some of a slew of planned defence acquisitions, analysts said, including a $10.5 billion fighter jet contract, one of the world's largest on offer.

India, among a host of countries wary of China's economic and military heft, is also eyeing surveillance helicopters, transport aircraft and submarines to beef up defences in the air as well as in the Indian Ocean. Finance Minister Pranab Mukherjee, presenting the 2011-2012 budget to parliament, set the military budget at just over 1.64 trillion rupees ($36.28 billion), up from last year's 1.47 trillion rupees. Last year the increase was about 4 percent.

"China is the real long-term challenge on the strategic horizon and India's security planning is geared toward it," said retired brigadier Gurmeet Kanwal who heads the government-funded Centre for Land Warfare Studies. China, which considers the U.S. military as its main rival, set its defence spending at $78 billion last year. It is expected to announce a defence budget for 2011 later this week ahead of an annual session of parliament. The core U.S. defense budget -- not including war funding -- was $530 billion in 2010.

More than 40 percent of the Indian defence budget for 2011 will be spent on capital expenditure, Mukherjee said, while the rest will go toward maintaining one of the world's largest standing armed forces. "Needless to say, any further requirement for the country's defence would be met," he said seeking to assuage concerns that the rise in spending was short of the military's expectations.

Old rival and neighbour Pakistan, which like India, also has nuclear weapons, is also a factor in India's defence planning.