Following its controversial nuclear weapons tests, the Indian government has announced a fourteen per cent increase in military spending.

Presenting the first budget of the Hindu Nationalist BJP government, the finance minister, Yashwant Sinha, said there could be no compromise in the country's defence preparedness.

The BBC South Asia correspondent says that sentiment was cheered by many members of parliament, but much of the rise in defence expenditure is accounted for by a pay award to the armed forces.

Mr Sinha expressed confidence that sanctions imposed by several countries after the nuclear tests would not have any significant economic impact.

He said he hoped to double foreign investment in India in two years.