Islamabad, June 2 (IANS) Pakistan has increased its defence budget by nearly 10 percent to 545 billion rupees ($5.8 billion) for the 2012-13 fiscal year.

The government had earmarked 495 billion rupees in the 2011-12 fiscal year. However, the actual expenditure was 509.32 billion rupees.

The current allocation amounted to 18.4 percent of Pakistan's total budget outlay of 2,960 billion rupees for the fiscal July 2012 to June 2013, Xinhua reported.

The Pakistan government has traditionally made defence allocations with the objective of maintaining conventional parity with India. However, a financial crunch has forced it to balance military spending and expenditure on development and welfare programmes.

The decrease in US aid has affected the defence budget, analysts said.

Finance Minister Abdul Hafeez Shaikh presented the budget Friday in parliament.