In a move that would help the country save millions of dollars, Pakistan has decided to reduce its half-a-million-strong army by around 50,000 troops this year.

A decision to this effect was taken at a two-day meeting in Rawalpindi of top generals, chaired by President Pervez Musharraf.

"The restructuring plan envisages the army to be lean but lethal and hard hitting. It will improve the teeth to tail ratio, in which tail is being reduced by about 50,000 men to allow sizeable savings in funds," a defence statement issued on Tuesday night said.

The entire top brass of the Pakistan Army from major generals above took part in the meeting at the Army Headquarters.

The statement said the manpower saving is being directed to enhance the combat efficiency of the army.

"However, this reduction in manpower will in no case affect the fighting potential of the army, it will rather transform the army into more potent, enhance its response capacities and result in a fine balance between quality and quantity," it said.

Officially, Pakistan has been pegging down its defence spending at the same levels in the past two years.

Last year the government allocated around $ 3 billion to defence from the total budget revenue of $ 14 billion.

Pakistan spends roughly four per cent of its GDP on defence.