The government on Friday allocated Rs.1,47,344 crore towards defence in 2010-11 budget, a paltry four percent increase from last year's Rs 1,41,703 crore.

Of the allocation provided, Rs 60,000 crore would go for capital expenditure, Finance Minister Pranab Mukherjee said presenting the Budget for 2010-11 in the Lok Sabha.

The four percent increase in real terms would amount to only Rs 5,641 crore.

Last year, the government had provided a steep hike of about 34 percent for the defence working out to an increase of Rs 36,103 crore.

Mukherjee, however, said considering the importance of defence of the country, more funds would be provided on the basis of requirements in the future.

The defence allocation continues to hover over 2.5 per cent of the GDP, though there have been suggestions to increase it substantially in view of the prevailing security situation.