Russia's government approved a 10-year space program on Thursday and space agency chief Anatoly Perminov said it sought growth and innovation as the industry shakes off post-Soviet stagnation.
A space agency source said the 2006-15 Federal Space Program budget was around $10.50 billion — "substantially higher" than previously, but still modest compared to the resources of fellow space giant the United States.
Under the program, Russia aims to develop a new craft that will eventually replace the 38-year-old Soyuz manned launch vehicle, a step in a long-term plan to send astronauts to Mars.
"(The Russian space industry) has come out of stagnation and is confidently advancing," Itar-Tass news agency quoted Perminov as telling a government meeting.
Russia's 10-year budget is smaller than the one-year $16 billion budget of NASA, a fact Moscow has repeatedly pointed out during its two-year struggle to finance the operation of the International Space Station (ISS) during the U.S. space shuttle's absence.
Russia has launched all manned and cargo ships to the ISS since NASA grounded its shuttle fleet in February 2003 after seven astronauts were killed when Columbia disintegrated on re-entry.
The shuttle had been due to return to flight on Wednesday but the launch was delayed because of a technical fault.
The end of the Cold War brought to a close the space race between the Soviet Union and the United States. In a hotly contested battle, the two superpowers tried to outdo each other with rocket launches and human space flight.
For half a century the vast resources ploughed into the space industry reaped rapid technological advance, but once the ideological fight finished and Russia's command economy collapsed the funding started drying up.
Russian Prime Minister Mikhail Fradkov said it was alarming that the industry had lost so much ground over recent years. "Now we are only catching up with that level which we lost, it is alarming and needs further analysis," Interfax quoted Fradkov as saying at the government meeting. "Everyone knows what sort of power we had, and it is to be hoped that it is still in our hands."
Plans to develop the industry could be thwarted by an aging work force, with an average age of 48, as low wages are failing to attract young people into the sector.
"If there is no inflow of young specialists, everything could be lost, regardless of the money invested," Itar-Tass quoted Fradkov as saying.