Chidambaram warns on defence cuts

"A cutback on expenditure on defence or police will severely compromise our defence and security preparedness," FM P Chidambaram said in a speech defending recent economic reforms aimed at reviving growth.

"It is therefore a self-evident truth that growth is the key to greater public welfare and greater security," he said in a speech on national security at a defence think-tank. "Provided we can grow at a higher rate we can provide more money," he said.

Chidambaram has driven cuts in spending, including USD 1.9 billion to defence acquisitions, in an attempt to meet a tough fiscal deficit target, sources told Reuters last week.