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India's defence budget rises, but problems remain

NEW DELHI (Reuters) - India raised its defence spending on Friday by 10 percent to $26.5 billion for 2008/09, but experts said a slow bureaucratic process could delay modernisation of the world’s fourth largest military.

Indian army soldiers perform a mock combat drill on the first day of a three-day long "Know Your Army" exhibition at Rajkot, January 8, 2008. REUTERS/Amit Dave

The latest increase was above inflation but defence analysts said spending had fallen below 2 percent of GDP for the first time in at least a decade due to fiscal pressures and larger outlays for farm, health and education sectors.

India seldom spends its entire budget allocation for defence because of red tape associated with arms purchases, and analysts said unless it clears pending deals faster, the budgetary allocation would not make any difference.

“We know that physical outlays don’t get translated into outcomes and when you consider this aspect with a below 2 percent spending of GDP, you know it is not a happy augering,” C. Uday Bhaskar, former director of New Delhi’s Institute for Defence Studies and Analyses, said on Friday.

“They have a long shopping list and every year all they have been doing is returning money as files have not moved.”

India is planning one of its biggest ever arms purchases, a $10 billion deal to buy 126 fighter jets and U.S. Defense Secretary Robert Gates was in India earlier this week to push American bids for that deal.

It also has plans to spend $30 billion on imports over the next four years to modernise its largely Soviet-era arms as India asserts its military power in South Asia.

But experts said politicians no longer saw defence as an urgent priority.

“The bureaucratic system has become unresponsive, there is no urgency and they are not looking at defence as a national issue,” Ajai Sahni of New Delhi’s Institute for Conflict Management said. “There is no missionary purpose anymore.”

At least 38 court cases relating to arms agreements are still pending against bureaucrats and military officers, and analysts say civil servants are afraid of signing contracts fearing more controversies.

Editing by Simon Denyer and Alex Richardson