ISLAMABAD, April 12: The country's defence budget is expected to increase 'substantially' in the fiscal year 2004-05 to meet pressing requirements, particularly of the air force and the navy, Dawn has learnt.

The allocation for defence will increase after about a decade during which it has been decreasing or has remained frozen. Indian defence allocation had increased by at least 100 per cent during the period, sources said.

The sources said the relevant quarters were working on budget estimates and shopping lists of the navy and the PAF but the allocation would increase both in terms of size and percentage of the Gross Domestic Product.

Budget estimates for 2002-03 had projected defence spending at Rs146 billion or 3.6 per cent of the GDP, that was revised to Rs160.1 billion or four per cent of the GDP. The allocation for the current year is Rs160.3 billion or 3.6 per cent of the GDP. The current year's public sector development programme is also of Rs160 billion.

The navy's capability is expected to be enhanced by the induction of submarines, frigates, marine surveillance aircraft and helicopters. The sources said the government was likely to spend $12-15 billion for the refurbishment and modernization of the air force over the next five years because of growing realization among the defence authorities that ground military strength could be neutralized without an effective air defence.

When contacted, Finance Minister Shaukat Aziz did not deny the proposed increase in the budget but said the defence committee of the cabinet in its meeting on Monday did not discuss the issue.

The country is also entitled to use for defence purposes during the year about half of the $3 billion package from the United States. The air force was going to get major focus in the coming years, said the sources.

They argued that Indian offensive capabilities, particularly the series of its long and medium range surface-to-surface missiles and a large fleet of combat aircraft, could create a serious threat to Pakistan's security.

They said that while the Indian air force had become the fourth largest in the world with the induction of Su-30 MKIs and Jaguars, the PAF had suffered owing to non-procurement of aircraft and other weapons since the late 1980s in the wake of the imposition of the Pressler Amendment by the US.

The Indian air force consists of nearly 1,000 aircraft, including 770 front-line and 140 second-line fighters and combat-capable trainers. The PAF has 32 F-16 aircraft and a combat strength of a little over 400 fighter aircraft.