Putin spoke at a Kremlin meeting of recently promoted generals, telling them the government must act after years of discussions, RIA Novosti reported.
"We must finalize the creation of an optimal structure for defense spending as soon as possible," Putin said. "The maintenance of the armed forces should not take up more than 30 percent of the defense budget, while the share of arms development and procurement should reach 70 percent."
The government plans to increase spending on the military almost 60 percent by 2015, from $61 billion this year to $97 billion. A procurement program approved in 2011 called for upgrading up to 11 percent of military equipment every year through 2020.