Here are some of the significant highlights of the Indian Financial Budget – THE most important even in the financial landscape in India EVERY year.
- In the backdrop of C Rangarajan Committee report, Government urges for consensus in Parliament on subsidies in fertiliser, petrol and food.
- The allocation to the states from the central pool of revenue as per the 12th Finance Commission has been stepped up to Rs 1,03,710 crore (Rs 1037.10 billion) in 2006-07 as against Rs 94,402 crore (Rs 944.02 billion) in 2005-06.
- With the implementation of the 12th Finance Commission recommendations, state finances have substantially improved.
- The compensation provision for loss of revenue to states with the implementation of VAT has been put at Rs 3000 crore (Rs 30 billion).
- Revenue deficit to be 2.1 per cent of GDP. Fiscal deficit 3.8 per cent of GDP im 2006-07.
- After 20 years gross fiscal deficit is less that gross budgetary deficit.
- Plan expenditure has gone up to 30.6 per cent.
- The defence budget raised to Rs 89,000 crore (Rs 890 billion) in 2006-07 from Rs 83,000 crore (Rs 830 billion) in the current year. Of this Rs 37,458 crore (Rs 374.58 billion) would be capital expenditure.
- Rs 100 crore (Rs 1 billion) special grant for Punjab Agricultural University as a centre of excellence for its commendable work in agricutural research.
- 500 ITIs to be upgraded in five years. Work has already started in 100 ITIs and would be taken up in the remaining 400 institutes soon. Rs 97 crore (Rs 970 million) allocated in 2006-07.
- Special assistance of Rs 848 crore (Rs 8.48 billion) for Jammu and Kashmir for its reconstruction fund, including Rs 230 crore (Rs 2.30 billion) for Baglihar project. This will be in addition to 2006-07 state plan of Rs 2,300 crore (Rs 23 billion).
- Rs 10 crore (Rs 100 million) allocated for preparatory work for celebrating the 150th anniversary of the First War of Independence of 1857 in a befitting manner.
- To safeguard old art forms, Vedic chanting and Ram Lila have been declared UNESCO heritage and will be granted Rs 5 crore (Rs 50 million).
- Comprehensive Insurance Regulatory and Development Authority bill to be introduced in 2006-07 incorporating the recommendations of K P Narasimhan Committee on insurance sector revamp. The committee has already submitted its report to government and IRDA is studying its recommendations.
- An Investors Protection Fund will be set up and funded by fines and penalties to safeguard the interests of retail investors.
- FII investment limit in stock markets will be raised from $1.75 billion to $2 billion to deepen, strengthen and broaden the market.
- Raise in the aggregate investment of overseas investors from $1 billion to $2 billion is proposed.
- An investment protection fund under the aegis of SEBI would be set up.
- Rs 50 cr (Rs 500 million) for Mumbai, Kolkata, Chennai varsities.
- Eighty two power projects are in various stages of implementation in the country to overcome power shortage. This when completed in 1 to 3 years will generate 33,000 mws of power in PSUs and 6500 mws in private sector. Of this, 15,000 mw of power generation is to be installed by March 2007.
- Five mega power projects of Rs 4000 crore (Rs 40 billion) each is to be set up for which clearance is to be given by March 31, 2006. Of this, one each will come in Chhattisgarh and MP. The remaining three will be in coastal areas of Maharashtra, Karnataka and Gujarat.
- NHAI to be reconstituted to make it more effective.
- A new deep draft port to be set up in West Bengal. A study is to be conducted.
- The National Institute of Port Management in Chennai to be renamed as National Maritime Academy and converted into a Central University with branches in Mumbai, Viskhapatnam and Kolkata.
- Old age pension to be increased to Rs 200 per month for above 75 years of age.
- Allocation for it put at Rs 1430 crore (Rs 14.3 billion) from the Centre and the state government to provide matching contribution.
- Rajiv Gandhi drinking water programme to get Rs 4680 crore (Rs 46.8 billion) next year as against Rs 3645 crore this year.
- National Health Mission allocation increased to Rs 8207 crore (Rs 82.07 billion) in next fiscal from Rs 6,553 crore (Rs 65.53 billion) this year.
- Government plans to eradicate polio by December 2007, Chidambaram said.
- The Finance Minister said that Rs 14,300 crore (Rs 143 billion) for rural employment programme would be scheduled during 2006-07, out of which Rs 11,300 crore (Rs 113 billion) for NREG programme and Rs 3,000 crore (Rs 30 billion) for SGRY.
- New towns to be established on specific themes.
- For gender budgeting under various heads, Rs 28,737 crore (Rs 297.37 billion) has been allocated.
- Special schemes to be announced for STs and SCs for their development.
- India to be made a manufacturing hub for textiles, steel, metals and petroleum products.
- Maulana Azad Educational Foundation corpus doubled to Rs 200 crore (Rs 2 billion) for greater financial support to organizations involved in minority welfare.
- Allocation for national Urdu education programme increased to Rs 13 crore (Rs 130 million) from Rs 10 crore (Rs 100 million) this year.
- Separate window for tenant farmers to ensure loan share. Agri credit proposed to be increased to Rs 175,000 crore (Rs 1750 billion) next year as against Rs 1,41,500 crore (Rs 1415 billion), covering additional 50 lakh farmers.
- Farmers to receive short term credit at 7 per cent.
- Budgetary loan for PSEs has been fixed at Rs 16901 crore (Rs 169.01 billion) including Rs 2791 crore ( Rs 27.91 billion) for Railways.
- Ninety-six per cent of the golden quadrilateral would be completed by June 2006 and the corridor would be completed by the end of 2008.
- Six lakh hectares of irrigation potential expected to be created this year. Rupees nine hundred and forty-four crore (Rs 9.44 billion) released this year under the Accelerated Irrigated Benefit Programme.
- Allocation on education increased by 31.5 per cent to over Rs 24,150 crore (Rs 241.5 billion) and that for healthcare raised by 22 per cent to Rs 12, 546 crore (Rs 125.46 billion).
- Entire Rs 1,100 crore (Rs 11 billion) for rural electrification released this year and 10,366 villages to be electrified.
- Five lakh additional class rooms to be constructed and 150,000 additional teachers to be appointed.
- Larger budgetary support will be given to Bharat Nirmal Programme: Rs 18696 crore (Rs 186.96 billion) to be given which represents a hike of 54 per cent.
- Total budget for north-eastern region will be Rs 12,041 crore (Rs 120.41billion) including Rs 1,350 crore (Rs 13.5 billion) for the ministry of north-east development.
- A massive immunisation programme will be launched to eradicate polio completely by 2007.
- Allocation for mid-day meal scheme to be enhanced to Rs 4813 crore (Rs 48.13 billion) next fiscal as against Rs 3014 crore (Rs 30.14 billion) this year.
- Gross budgetary support for annual plan expenditure has been raised to Rs 1,74,725 crore (Rs 1747.25 billion) for 2006-07 as against Rs 1,43,497 crore (Rs 1434.97 billion), an increase of 20.4 per cent.
- Likewise for the central plan increased to Rs 1,31,285 crore (Rs 1312.85 billion) next fiscal.
- Eight flagship programmes of the UPA including Sarva Shiksha Abhiyan and Mid-Day Meal Scheme will get a total allocation of Rs 60,015 crore (Rs 600.15 billion) in 2006-07 as against Rs 34,927 crore (Rs 349.27 billion) in the current year.
- Metro in Hyderabad to be considered.
Here are some of the social programs that have been emphasized upon:
Programmes to increase by 43.2 per cent from Rs.34,927 crore in 2005-06 to Rs.50,015 crore.
North Eastern Region (NER): In addition 10 per cent of the Plan Budget of each Ministry/Department to be allocated for schemes and programmes in the North Eastern Region (NER); for the flagship programmes allocation of Rs.4,870 crore in 2006-07; total allocation for NER is Rs.12,041 crore.
Sarva Siksha Abhiyan: 93 per cent of children in age group 6-14 years are in school, number of children not in school has come down to about one crore; outlay to increase from Rs.7,156 crore to Rs.10,041 crore in 2006-07; 500,000 additional class rooms to be constructed and 150,000 more teachers to be appointed; Rs.8,746 crore to be transferred to the Prarambhik Siksha Kosh from revenues through education cess.
Mid-day Meal Scheme: 12 crore children now covered; allocation to be enhanced from Rs.3,010 crore to Rs.4,813 crore.
Drinking Water and Sanitation: 56,270 habitations and 140,000 schools to be covered in the current year; non-recurring assistance of Rs.213 crore to be provided in 2006-07 for setting up district-level water testing laboratories and field- level water testing kits; provision for Rajiv Gandhi National Drinking Water Mission to be increased from Rs.3,645 crore to Rs.4,680 crore and for Rural Sanitation Campaign from Rs.630 crore to Rs.720 crore.
National Rural Health Mission: More than 200,000 Associated Social Health Activists (ASHA) to be fully functional and over 1,000 block level community health centres to provide round the clock services; allocation increased from Rs.6,553 to Rs.8,207 crore.
Integrated Child Development Services: Additional 188,168 centres created; Centre assisting the States to the extent of 50 per cent of the actual expenditure incurred for supplementary nutrition or 50 per cent of the cost norms, whichever is less – cost estimated at Rs.1,500 crore and this assistance to increase to Rs.1,700 crore; total allocation for ICDS increased from Rs.3,315 crore to Rs.4,087 crore.
National Rural Employment Guarantee Scheme: Allocation of Rs.14,300 crore for rural employment in 2006-07 with Rs.11,300 crore under NREG Act and Rs.3000 crore under SGRY, more funds to be
provided according to need.
Jawaharlal Nehru National Urban Renewal Mission: Estimated outlay of Rs.6,250 crore for 2006-07 with grant of Rs.4,595 crore; Government to promote establishment of new towns, preferably focussed on a specific ind ustry, for example Information Technology, or a specific theme, for example education or health.
National Social Assistance Programme: Old age pension to destitutes above the age of 65 years to increase from Rs.75 per month to Rs.200 per month; Rs.1,430 crore provided for 2006-07; State Governments urged to make an equal contribution; a system to be established, within two years, for pension to be credited directly to the account of the beneficiary in a post office or a bank.
Women and Children: Gender sensitivities of the budgetary allocations highlighted through an enlarged statement on gender budgeting to include schemes where 100 per cent of the allocation is for the benefit of women as well as schemes where at least 30 per cent of the allocation is targeted towards women; statement covers 24 demands for grants in 18 Ministries/Departments and five Union Territories and schemes with an outlay of Rs.28,737 crore; 32 Ministries and Departments have set up Gender Budgeting Cells.
Scheduled Castes and Scheduled Tribes: A statement on schemes for welfare and development of SCs and STs included in Budget; allocations for schemes benefiting only SCs and STs enhanced by 14.5 per cent to Rs.2,902 crore and for schemes with at least 20 per cent allocation for SCs and STs enhanced by 13.9 per cent to Rs.9,690 crore; equity contribution to the National SC Finance and Development Corporation increased to Rs.37 crore and to the National Safai Karamchari Finance and Development Corporation to Rs.80 crore.
Minorities: Corpus of Maulana Azad Educational Foundation to be doubled to Rs.200 crore; Rs.16.47 crore to be contributed to strengthen equity base of National Minorities Development and Finance Corporation; Corporation to intensify efforts to reach to artisans and weavers in urban and peri- urban centres especially in districts with concentration of minorities; programme to focus on skill enhancement, credit and techno-managerial support; allocation to National Council for Promotion of Urdu Language increased from Rs.10 crore to Rs.13 crore; Government to finance 20,000 merit-cum-means based
scholarships to encourage students to pursue higher studies.
Kasturba Gandhi Balika Vidyalaya Scheme: 1,000 new residential schools for girls from SC, ST, OBC and minority communities to be opened in 2006-07; Rs.128 crore provided and an additional sum of Rs.172 crore to be provided during the year; as a further incentive to the girl child who passes the VIII Standard Examination and enrols in a secondary school, a sum of Rs.3,000 to be deposited in her name, to be withdrawn by her at age 18.
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