Today's allocation is up by Rs 25,169 crore from last year's revisited estimate of Rs 1,78,503 crore. The budget estimate was Rs 1,93,407 crore but Rs 14,904 crore was slashed by the finance ministry owing to the strain on the economy.
"I propose to increase the allocation for defence to Rs 2,03,672 crore. This will include Rs 86,741 crore for capital expenditure," Chidambaram said.
"The defence minister has been most understanding and I assure him and the House that constraints will not come in way of providing any additional requirement for the security of the nation," he said.
The defence ministry is in a major modernization process with several acquisitions in the pipeline besides upgradation of infrastructure in the northeast along with China border.
Among the major acquisitions in the offing are the 126 multirole combat aircraft, 22 Apache attack choppers and 15 heavy-lift choppers.
The capital expenditure was hiked from Rs 69,579 crore last year to Rs 86,741 crore.
"Factoring the current economic scenario, he (Chidambaram) has been fair to the Defence sector also by increasing the budget and giving an assurance that should there be any urgent need in future the same would be provided," Antony told reporters.