India has approved a £1.7 billion (£1.1 billion) plan to launch its first astronauts into space by 2015.

The Indian Space Research Organisation (Isro) will attempt to put two people into orbit 172 miles (275km) above the Earth for seven days.

The Cabinet must still agree to the plan, but that is expected to be a formality now that the Planning Commission has approved it, an organisation spokesman said. The decision comes after its launch in October of India’s first unmanned lunar mission, Chandrayaan-1, which is now orbiting the Moon to compile a 3-D map of its surface. The mission catapulted India into the world’s most elite club, with the United States, Russia, Japan and China, as the only countries capable of independently reaching the Moon.

India’s second unmanned lunar mission, Chandrayaan-2, is scheduled to be launched in 2011.

Isro has been lobbying for years to secure government funding for its plans to send an astronaut into space by 2014, eleven years after China, and to the Moon by 2020, four years before China’s target date. Critics say that Isro’s plans are a waste of money in a country where 76 per cent of the population of 1.1 billion live on less than $2 a day and child malnutrition is on a par with sub-Saharan Africa.

Isro argues that India makes money from commercial satellite launches and that scientific research from the space programme has helped its IT industry.

Indian officials are concerned that India lags behind China, which shot down a satellite in 2007 and completed its first space walk last year.

Richard Fischer, a senior fellow on Asian Military Affairs at the International Assessment and Strategy Centre, said last week that India needed to review its space programme to confront the military threat from China. “We have to look forward to China performing military activities from the Moon,” he told a conference in Delhi.

Isro’s plans were given a boost last week when the Government increased its budget for this year by 27 per cent to 44.6 billion rupees (£633 million). Of that, 1.75 billion rupees is to be spent on training science personnel – a 73 per cent increase on last year.

K Radhakrishnan, a member of India’s Space Commission and director of the Vikram Sarabhai Space Centre, said that the budget approved on Friday would cover development of a new space vehicle.

The space agency unveiled a design for its manned space capsule last month. It would be able to accommodate three astronauts and mission-management systems.

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