Defence gets 2.95 lakh crore

New Delhi: The defence budget was increased by 7.81 per cent to Rs 2.95 lakh crore against last year's Rs 2.74 lakh crore, belying expectations of a significant hike when the armed forces are facing growing challenge on the borders with both Pakistan and China.

In his budget address, Finance Minister Arun Jaitley said the government will develop two defence industrial production corridors and bring out an industry- friendly military production policy to promote the domestic defence industry.

Out of total allocation of Rs 2,95,511 crore for defence budget, Rs 99,947 crore has been set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware.