Defence budget may increase by 4.5%

The defence budget for 2007-08 is likely to see a modest increase of around 4.5 per cent — if the Army is unable to find a way to spend Rs 4,000 crore on capital equipment.

In November-December last year, the finance ministry had held back Rs 3,000 crore from the Army’s capital outlay, which had remained unspent during the year.

The services were warned they would lose another Rs 4,000 crore in the budgetary outlay for the forthcoming fiscal, unless they showed evidence of intent to spend.

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