To give a further push to its rapid military modernization, India Friday hiked its military spending by over 17 percent to Rs.1,93,407 crore (over $42 billion/Rs.1.93 trillion).

In real terms, this increase amounts to Rs.28,992 crore ($6.5 billion) in the total outlay for defence for 2012-13 compared to Rs.1,64,415 crore ($36 billion) for the previous year (2011-12).

Finance Minister Pranab Mukherjee, presenting the general budget for the next fiscal in the Lok Sabha, said this allocation was based on the present needs projected by the defence ministry and that further needs for national security would be met.

He also announced a raise in the capital expenditure of the armed forces to Rs.79,579 crore ($17.5 billion), a 15.7 percent hike from last year's capital allocation of Rs.69,199 crore ($15 billion).

The capital expenditure will go towards new procurement of weapons and systems, and towards committed liability in the form of payments for contracts already signed in the previous years.

India is on the verge of signing a whopping $20 billion contract for 126 Rafale medium multirole combat aircraft, apart from a $600 million deal for 75 Pilatus PC-7 basic trainer for its air force.

It has already signed contracts for 10 C-17s transport planes and upgrade of 51 Mirage-2000 combat jets in 2011.

It also has 49 warships on order with several shipyards, of which 40 are with Indian shipyards.

Several artillery purchases for its army are also due. In particular, the proposal to buy 145 ultralight howitzers from the US under a government-to-government sale is also progressing.IANS