Expressing that the security situation around the country was "fluid", Defence Minister George Fernandes said on Monday that his ministry would seek a hike in the Defence Budget.

"It is not only our hope, but also our wish that the armed forces budget increase continues" so that the pressing need for modernisation may be met, he told reporters on the sidelines of a function to award the best marching trophies for this year's Republic Day parade.

In an apparent indication that some of the major defence deals in the pipeline could be struck before the end of the current financial year, the defence minister, when asked if his ministry would surrender funds earmarked for capital outlay, said "there is still time left for capital outlay projects to go through."

His remarks assume significance as two major defence deals - a $2.4-billion deal for the manufacture of French Scorpene Submarines in India and the $2-billion Advance Jet Trainer deal - are pending approval with the Cabinet Committee on Security.

There are also a number of other armament purchases specially for radars, sensors, tank mounted howitzers pending clearance.