New Delhi, May 15: The government will increase expenditure on buying new equipment for the armed forces to half of the defence allocations. Capital expenditure will be stepped up gradually to 50 per cent of the defence budget from about 42 per cent currently, defence minister Pranab Mukherjee said here today.

In the last seven years, defence allocations have grown at an average 9.5 per cent per annum. Capital expenditure has also increased from around 25 per cent in 2000-2001 to about 42 per cent in 2006-2007, Mukherjee told controllers of defence accounts. He was opening a three-day conference on defence accounts.

The defence ministry was finalising the 11th plan for the armed forces. Even if expenditure would be stepped up, he said “optimal resource allocation for defence within total central government outlay would continue to be a daunting task given the Fiscal Responsibility and Budget Management Act obligations and interest and subsidy burdens”.

The minister said defence personnel would be given more responsibility and powers to take decisions on acquisition of equipment.

On the sidelines of the conference, the defence minister said India was not testing the strategic Agni III missile (range of about 3,000 km) because of “self-imposed restraint”. He said there was no political pressure on the Defence Research and Development Organisation (DRDO) to put off the test.

“As responsible members of the international community, we want to keep our international commitments on non-proliferation,” Mukherjee said. The DRDO was at liberty to carry out “cold bed tests” for the sub-systems of the missile.

The DRDO chief and scientific adviser to the defence minister, M. Natarajan, had said yesterday that the outfit was ready to test the Agni III missile.