Putin said the modernization programme will focus on strategic nuclear forces, air-defense systems, communication, intelligence, fifth generation fighters and the navy. He said about 4.7 trillion roubles will go to the navy with one third of the amount to be spent in the next five years.

Putin also launched the dock trial of Russia's second Borei class nuclear submarine that will carry the Bulava intercontinental missile. Russia is completing the construction of three Borei-class nuclear submarines, and the first one, Yuri Dolgoruky, is already undergoing sea trial.

Russia plans to build a total of eight to nine of the submarines. The project -- the most ambitious in the Russian fleet's post-Soviet history -- has been hampered by a series of failed tests in recent years of the Bulava missile, which the Borei class submarines are being built to launch.