That is a SIPRI "estimate".The Finance minister declared a Defence budget of 32 Billion Dollars for 2010 in the Parliament
http://www.defence.pk/forums/india-defence/48621-india-unveils-32b-defense-budget.html
And this is for 2011
India
This accounts for 1.83% of the annual Budget!!!
Cool. I am guessing spending hike has something to do with acquisition of new weapons. With big purchases off the line in near future, spending can be lowered even further.