Moscow, July 14: Russia's draft budget for 2004 calls for allocating USD13 billion for defence, 14 per cent more than this year's military budget, a news report said today. The proposed amount equals 2.6 per cent of Gross Domestic Product, the Interfax-military news agency reported, citing an unnamed source in the finance ministry.

One of the key goals of the budget is to put the military on track to increase officers' salaries by 40 per cent by 2005 compared to 2000 wages, the report said. Russia is also embarking on a long-awaited program to decrease its Reliance on conscription and switch to a mostly professional force. Defense minister Sergei Ivanov said last week that Russia would spend USD2.6 billion over the next four years on military reform.

In June, finance minister Alexei Kudrin said defense and police spending would total USD23.29 billion next year, an increase of us$1.53 billion. Bureau Report