The government has increased the allocation for defence from Rs 83,000 crore to Rs.89,000 crore in 2007-07 Budget.

This will include Rs 37,458 crore for capital expenditure, Finance Minister P Chidambaram announced in the Lok Sabha Tuesday.

The minister justified the higher allocation keeping in view the enhanced expenditure on modernisation of the defence forces.

The government has fulfilled the long-standing need of retired armed forces personnel below officer rank for better pensionary benefits, he said.

About 12 such personnel have benefited to the tune of Rs 4,660 crore with effect from January 1, 2006, Chidambaram said.