February 26, 2010
I rise to present the Union Budget for 2010-11.
In 2009,when I presented the interim Budget in February and the regular Budget in July in this august House, the Indian economy was facing grave uncertainties. Growth had started decelerating and the business sentiment was weak. The economy's capacity to sustain high growth was under serious threat from the widespread economic slowdown in the developed world.
2. It was not clear to us, as also to the policy makers in many other countries, how this crisis would eventually unfold. What would be its impact on the growth momentum of the Indian economy? How soon will we be able to turnaround the fortunes of our economy? The short term global outlook was bleak and the consensus was that year 2009 would face the brunt of this crisis across the world.
3. At home, there was added uncertainty on account of the delayed and subnormal south-west monsoon, which had undermined the kharif crop in the country. There were concerns about production and prices of food items and its possible repercussions on the growth of rural demand.
4. Today, as I stand before you, I can say with confidence that we have weathered these crises well. Indian economy now is in a far better position than it was a year ago. That is not to say that the challenges today are any less than what they were nine months ago when UPA under the leadership of Mrs Sonia Gandhi was elected back to power and Prime Minister Dr. Manmohan Singh formed the Government for the second term.
5. The three challenges and the medium term perspective that I had outlined in my last Budget Speech remain relevant, even today. These would continue to engage the Indian policy-planners for the next few years.
6. The first challenge before us is to quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the 'double digit growth barrier'. This calls for imparting a fresh momentum to the impressive recovery in growth witnessed in the past few months. In this endeavour, I seek Lord Indra's help to make the recovery more broad-based in the coming months.
7. Growth is only as important as what it enables us to do and be. Therefore, the second challenge is to harness economic growth to consolidate the recent gains in making development more inclusive. The thrust imparted to the development of infrastructure in rural areas has to be pursued to achieve the desired objectives within a fixed time frame.
8. We have to strengthen food security, improve education opportunities and provide health facilities at the level of households, both in rural and urban areas.These are issues that require significant resources, and we have to find those resources.
9. The third challenge relates to the weaknesses in government systems, structures and institutions at different levels of governance. Indeed, in the coming years, if there is one factor that can hold us back in realising our potential as a modern isation,it is the bottleneck of our public delivery mechanisms. There have been any initiatives in this regard, in different sectors, at different points of time.Some of them have been effective in reforming the way the Government works in those areas. But we have a long way to go before we can rest on this count.
10.The Union Budget cannot be a mere statement of Government accounts. It has to reflect the Government's vision and signal the policies to come in future.
11. With development and economic reforms, the focus of economic activity has shifted towards the non-governmental actors, bringing into sharper focus the role of Government as an enabler.
12.An enabling Government does not try to deliver directly to the citizens everything that they need. Instead it creates an enabling ethos so that individual enterprise and creativity can flourish. Government concentrates on supporting
and delivering services to the disadvantaged sections of the society.
13. It is this broad conceptualisation of the Budget that informs my speech today. I would now begin by presenting a brief overview of the economy.
Overview of the Economy
14. Yesterday, I laid on the table of the House the Economic Survey, which gives a detailed analysis of the economic situation of the country over the past twelve months. I intend to highlight only a few salient features that form the backdrop of this Budget.
15. The fiscal year 2009-10 was a challenging year for the Indian economy.
The significant deceleration in the second half of 2008-09, brought the real GDP
growth down to 6.7 per cent, from an average of over 9 per cent in the preceding
three years. We were among the first few countries in the world to implement a
broad-based counter-cyclic policy package to respond to the negative fallout of
the global slowdown. It included a substantial fiscal expansion along with liberal
monetary policy support.
16. The effectiveness of these policy measures became evident with fast
paced recovery. The economy stabilised in the first quarter of 2009-10 itself, when
it clocked a GDP growth of 6.1 per cent, as against 5.8 per cent in the fourth
quarter of the preceding year. It registered a strong rebound in the second
quarter, when the growth rate rose to 7.9 per cent. With the Advance Estimates
placing the likely growth for 2009-10 at 7.2 per cent, we are indeed vindicated in
our policy stand. The final figure may well turn out to be higher when the third and
fourth quarter GDP estimates for 2009-10 become available.
17. This recovery is very encouraging for it has come about despite a negative
growth in the agriculture sector. More importantly, it is the result of a renewed
momentum in the manufacturing sector and marks the rise of this sector as the
growth driver of the economy. The growth rate in manufacturing in December
2009 was 18.5 per cent— the highest in the past two decades. There are also signs
of a turnaround in the merchandise exports with a positive growth in November
and December 2009 after a decline of about twelve successive months. Export
figures for January are also encouraging. Significant private investment can now
be expected to provide the engine for sustaining a growth of 9 per cent per
annum. With some luck, I hope to breach the 10 per cent mark in not-too-distant a
18. A major concern during the second half of 2009-10 has been the
emergence of double digit food inflation. There was a momentum in food prices
since the flare-up of global commodity prices preceding the financial crisis in
2008, but it was expected that the agriculture season beginning June 2009 would
help in moderating the food inflation. However, the erratic monsoons and drought
like conditions in large parts of the country reinforced the supply side bottlenecks
in some of the essential commodities. This set in motion inflationary expectations.
Since December 2009, there have been indications of these high food prices,
together with the gradual hardening of the fuel product prices, getting transmitted
to other non-food items as well. The inflation data for January seems to have
confirmed this trend.
19. Government is acutely conscious of this situation and has set in motion
steps, in consultation with the State chief ministers, which should bring down the
inflation in the next few months and ensure that there is better management of
food security in the country.
20. Managing a complex economy is a difficult task, more so when it is a
growing economy in a globalised world. And yet, choices have to be made and
they have to be well-timed.
21. After successfully managing the effects of the global slowdown, we need
to strengthen the domestic macroeconomic environment to help consolidate the
rebound in growth and sustain it over the medium term. We need to review the
stimulus imparted to the economy and move towards the preferred path of fiscal
consolidation that facilitated the remarkable growth in the pre-crisis five year
period. We need to make growth more broad-based and ensure that supplydemand
imbalances are better managed.
22. The success of the fiscal stimulus in supporting domestic demand could
be traced to its composition. The approach of the Government was to increase the
disposable income in the hands of the people by effecting reductions in indirect
taxes and by expanding public expenditure on programmes like the Mahatma
Gandhi National Rural Employment Guarantee Scheme and rural infrastructure.
Now that the recovery has taken root, there is a need to review public spending,
mobilise resources and gear them towards building the productivity of the
23. In shaping the fiscal policy for 2010-11, I have acted on the
recommendations of the Thirteenth Finance Commission. It has recommended a
calibrated exit strategy from the expansionary fiscal stance of last two years. The
Commission has recommended a capping of the combined debt of the Centre and
the States at 68 per cent of the GDP to be achieved by 2014-15.
24. As a part of the fiscal consolidation process, it would be for the first time
that the Government would target an explicit reduction in its domestic public debt-
GDP ratio. I intend to bring out, within six months, a status paper giving a detailed
analysis of the situation and a road map for curtailing the overall public debt. This
would be followed by an annual report on the subject.
25. I am happy to inform the Honourable Members that the process for
building a simple tax system with minimum exemptions and low rates designed to
promote voluntary compliance, is now nearing completion. On the Direct Tax
Code the wide-ranging discussions with stakeholders have been concluded. I am
confident that the Government will be in a position to implement the Direct Tax
Code from April 1, 2011.
26. On Goods and Services Tax, we have been focusing on generating a wide
consensus on its design. In November, 2009 the Empowered Committee of the
State Finance Ministers placed the first discussion paper on GST in the public
domain. The Thirteenth Finance Commission has also made a number of
significant recommendations relating to GST, which will contribute to the ongoing
discussions. We are actively engaged with the Empowered Committee to finalise
the structure of GST as well as the modalities of its expeditious implementation. It
will be my earnest endeavour to introduce GST along with the DTC in April, 2011.
People's ownership of PSUs
27. While presenting the Budget for 2009-10, I invited people to participate in
Government's disinvestment programme to share in the wealth and prosperity of
the Central Public Sector Undertakings.
28. Since then, ownership has been broad based in Oil India Limited, NHPC,
NTPC and Rural Electrification Corporation while the process is on for National
Mineral Development Corporation and Satluj Jal Vidyut Nigam. The Government
will raise about Rs.25,000 crore during the current year. Through this process, I
propose to raise a higher amount during the year 2010-11. The proceeds will be
utilised to meet the capital expenditure requirements of social sector schemes for
creating new assets.
29. Listing of Central Public Sector Undertakings improves corporate
governance, besides unlocking the value for all stakeholders—the government,
the company and the shareholders. Market capitalization of five companies which
have been listed since October, 2004 has increased by 3.8 times from the book
value of Rs.78,841 crore to Rs.2,98,929 crore.
30. The effective management of public expenditure by bringing it in line with
the Government's objectives is a part of the fiscal consolidation process. This
calls for proper targeting of subsidies and expenditure adjustment.
31. I had announced the intent of the Government for the fertiliser sector in
my Budget Speech of 2009. A Nutrient Based Subsidy policy for the fertiliser
sector has since been approved by the Government and will become effective
from April 1, 2010. This policy is expected to promote balanced fertilization
through new fortified products and focus on extension services by the fertiliser
industry. This will lead to an increase in agricultural productivity and
consequently better returns for the farmers. Over time, the policy is expected to
reduce volatility in the demand for fertiliser subsidy in addition to containing the
subsidy bill. Government will ensure that nutrient based fertiliser prices for
transition year 2010-11, will remain around MRPs currently prevailing. The new
system will move towards direct transfer of subsidies to the farmers.
Petroleum and Diesel pricing policy
32. In the last Budget, the constitution of an Expert Group, to advise the
Government on a viable and sustainable system of pricing of petroleum products,
was announced. The Group headed by Shri Kirit Parikh has submitted its
recommendations to the Government. Decision on these recommendations will
be taken by my colleague, the Minister of Petroleum & Natural Gas, in due course.
33. I am very happy to inform the Honourable Members that we have not only
adhered to the fiscal roadmap that I had presented as a part of the Budget
documents last year, but we have improved upon it. Except for meeting the
liabilities of the year 2008-09, we have not issued oil or fertiliser bonds. I shall
come to the numbers when I refer to the budget estimates a little later.
Improving Investment Environment
Foreign Direct Investment
34. Foreign Direct Investment (FDI) inflows during the year have been steady
in spite of the decline in global capital flows. India received FDI equity inflows of
US$ 20.9 billion during April-December, 2009 compared to US$ 21.1 billion during
the same period last year.
35. Government has taken a number of steps to simplify the FDI regime to
make it easily comprehensible to foreign investors. For the first time, both
ownership and control have been recognised as central to the FDI policy, and
methodology for calculation of indirect foreign investment in Indian companies
has been clearly defined. A consistent policy on downstream investment has also
been formulated. Another major initiative has been the complete liberalization of
pricing and payment of technology transfer fee, trademark, brand name and
royalty payments. These payments can now be made under the automatic route.
36. Government also intends to make the FDI policy user-friendly by
consolidating all prior regulations and guidelines into one comprehensive
document. This would enhance clarity and predictability of our FDI policy to
Financial Stability and Development Council
37. The financial crisis of 2008-09 has fundamentally changed the structure of
banking and financial markets the world over. With a view to strengthen and
institutionalise the mechanism for maintaining financial stability, Government has
decided to setup an apex-level Financial Stability and Development Council.
Without prejudice to the autonomy of regulators, this Council would monitor
macro prudential supervision of the economy, including the functioning of large
financial conglomerates, and address inter-regulatory coordination issues. It will
also focus on financial literacy and financial inclusion.
38. The Indian banking system has emerged unscathed from the crisis. We
need to ensure that the banking system grows in size and sophistication to meet
the needs of a modern economy. Besides, there is a need to extend the
geographic coverage of banks and improve access to banking services. In this
context, I am happy to inform the Honourable Members that the RBI is considering
giving some additional banking licenses to private sector players. Non Banking
Financial Companies could also be considered, if they meet the RBI's eligibility
Public Sector Bank Capitalisation
39. During 2008-09, the Government infused Rs.1900 crore as Tier-I capital in
four public sector banks to maintain a comfortable level of Capital to Risk
Weighted Asset Ratio. An additional sum of Rs.1200 crore is being infused now.
For the year 2010-11, I propose to provide a sum of Rs.16,500 crore to ensure that
the Public Sector Banks are able to attain a minimum 8 per cent Tier-I capital by
March 31, 2011.
Recapitalisation of Regional Rural Banks
40. Regional Rural Banks (RRBs) play an important role in providing credit to
rural economy. The capital of these banks is shared by the Central Government,
sponsor banks and State Governments. The banks were last capitalised in
2006-07. I propose to provide further capital to strengthen the RRBs so that they
have adequate capital base to support increased lending to the rural economy.
41. Improvement in corporate governance and regulation is an important part
of the overall investment environment in the country. Government has introduced
the Companies Bill, 2009 in the Parliament, which will replace the existing
Companies Act, 1956. The proposed new bill will address issues related to
regulation in corporate sector in the context of the changing business
42. Government has provided interest subvention of 2 per cent on preshipment
export credit up to March 31, 2010 for exports in certain sectors. I
propose to extend the interest subvention of 2 per cent for one more year for
exports covering handicrafts, carpets, handlooms and small and medium
Special Economic Zones (SEZs)
43. The SEZs have attracted significant flows of domestic and foreign
investments. In first three quarters of 2009-10 exports from SEZs recorded a
growth of 127 per cent over the corresponding period last year. Government is
committed to ensuring continued growth of SEZs to draw investments and boost
exports and employment.
44. The agriculture sector occupies centre-stage in our resolve to promote
inclusive growth, enhance rural incomes and sustain food security. To spur the
growth in this sector, the Government intends to follow a four-pronged strategy
covering (a) agricultural production; (b) reduction in wastage of produce;
(c) credit support to farmers; and (d) a thrust to the food processing sector.
45. The first element of the strategy is to extend the green revolution to the
eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern
UP, West Bengal and Orissa, with the active involvement of Gram Sabhas and the
farming families. For the year 2010-11, I propose to provide Rs.400 crore for this
46. In the 60th year of the Republic, it is proposed to organise 60,000 "pulses
and oil seed villages" in rain-fed areas during 2010-11 and provide an integrated
intervention for water harvesting, watershed management and soil health, to
enhance the productivity of the dry land farming areas. I propose to provide
Rs.300 crore for this purpose. This initiative will be an integral part of the
Rashtriya Krishi Vikas Yojana.
47. The gains already made in the green revolution areas have to be sustained
through conservation farming, which involves concurrent attention to soil health,
water conservation and preservation of biodiversity. I propose an allocation of
Rs.200 crore for launching this climate resilient agriculture initiative.
48. The second element of the strategy relates to reduction of significant
wastages in storage as well as in the operations of the existing food supply
chains in the country. This needs to be addressed. As the Prime Minister has said
recently, "We need greater competition and therefore need to take a firm view on
opening up of the retail trade." It will help in bringing down the considerable
difference between the farm gate prices, wholesale prices and retail prices.
49. There is wastage of grain procured for buffer stocks and public
distribution system due to acute shortage of storage capacity in the Food
Corporation of India. This deficit in the storage capacity is met through an
ongoing scheme for private sector participation where the FCI has been hiring
godowns from private parties for a guaranteed period of 5 years. This period is
now being extended to 7 years.
50. The third element of the strategy relates to improving the availability of
credit to farmers. I am happy to inform the honourable Members that banks have
been consistently meeting the targets set for agriculture credit flow in the past few
years. For the year 2010-11, the target has been raised to Rs.3,75,000 crore from
Rs.3,25,000 crore in the current year.
51. The Debt Waiver and Debt Relief Scheme for Farmers was a major
initiative of the UPA Government. In view of the recent drought in some States and
the severe floods in some other parts of the country, I propose to extend by six
months the period for repayment of the loan amount by farmers from December
31, 2009 to June 30, 2010.
52. In the last budget, I had provided an additional one per cent interest
subvention as an incentive to those farmers who repay their short-term crop loans
as per schedule. I propose to raise this subvention for timely repayment of crop
loans from one per cent to two per cent for 2010-11. Thus, the effective rate of
interest for such farmers will now be five per cent per annum. Necessary
provision in the Budget has been made.
53. The fourth element of the strategy aims at lending a further impetus to the
development of food processing sector by providing state-of-the art
infrastructure. In addition to the ten mega food park projects already being set
up, the Government has decided to set up five more such parks.
54. As a part of the farm to market initiative, External Commercial Borrowings
will henceforth be available for cold storage or cold room facility, including for
farm level pre-cooling, for preservation or storage of agricultural and allied
produce, marine products and meat. Changes in the definition of infrastructure
under the ECB policy are being made.
55. Accelerated development of high quality physical infrastructure, such as
roads, ports, airports and railways is essential to sustain economic growth. While
addressing the policy gaps in this sector, I propose to maintain the thrust for
upgrading infrastructure in both rural and urban areas. In the Budget for
2010-11, I have provided Rs.1,73,552 crore, which accounts for over 46 per cent of
the total plan allocations, for infrastructure development in the country.
56. To make a visible impact in the road sector, Government has targeted
construction of national highways (NHs) at the pace of 20 km per day. To push
the pace of implementation, changes have been made in the policy framework,
especially in respect of projects being executed through public private
partnerships (PPPs). For the year 2010-11, I propose to raise the allocation of road
transport by over 13 per cent from Rs.17,520 crore to Rs.19,894 crore.
57. Honourable Members have already heard from the Railway Minister about
the large investments required to modernise and expand the network. I have
provided Rs.16,752 crore in the Budget for 2010-11 for Railways to lend her a
helping hand. This is about Rs.950 crore more than last year, when a substantial
increase was made in the budgetary support for Railways.
58. To complement the dedicated freight corridor, the Delhi-Mumbai Industrial
Corridor project has been taken up for integrated regional development.
Preparatory activities have been completed for creation of six industrial
investment nodes with eco-friendly world class infrastructure.
India Infrastructure Finance Company Limited
59. Government established the India Infrastructure Finance Company Limited
(IIFCL) to provide long term financial assistance to infrastructure projects. Its
disbursements are expected to touch Rs.9,000 crore by end March 2010 and reach
around Rs.20,000 crore by March 2011. IIFCL has also been authorised to
refinance bank lending to infrastructure projects. It has refinanced Rs.3,000 crore
during the current year and is expected to more than double that amount in 2010-
11. The take-out financing scheme announced in the last Budget is expected to
initially provide finance for about Rs.25,000 crore in the next three years.
60. Government accords the highest priority to capacity addition in the power
sector. The framework for induction of super critical technology in large capacity
power plants of National Thermal Power Corporation is now in place. The Mega
Power Policy has been modified and is now consistent with the National
Electricity Policy, 2005 and Tariff Policy, 2006. It will help in lowering the cost of
generation and the cost of power purchased by distribution utilities. I have more
than doubled the plan allocation for power sector from Rs.2,230 crore in 2009-10
to Rs.5,130 crore in 2010-11. This does not include allocations for RGGVY, which
is a part of Bharat Nirman.
61. Coal is the mainstay of India's energy sector and 75 per cent of the power
generation is currently coal based. It is proposed to introduce a competitive
bidding process for allocating coal blocks for captive mining to ensure greater
transparency and increased participation in production from these blocks.
62. Government proposes to take steps to set up a "Coal Regulatory
Authority" to create a level playing field in the coal sector. This would facilitate
resolution of issues like economic pricing of coal and benchmarking of standards
63. The Jawaharlal Nehru National Solar Mission envisages establishing India
as a global leader in solar energy. An ambitious target of 20,000 MW of solar
power by the year 2022 has been set under the mission. I propose to increase the
plan outlay for the Ministry of New and Renewable Energy by 61 per cent from
Rs.620 crore in 2009-10 to Rs.1,000 crore in 2010-11.
64. The Ladakh region of Jammu and Kashmir faces an extremely harsh
climate and suffers from energy deficiency. To address this problem, it is
proposed to set up solar, small hydro and micro power projects at a cost of about
Environment and Climate change
65. To ameliorate the negative environmental consequences and increased
pollution levels associated with industrialisation and urbanisation, I propose to
take a number of proactive steps in the Budget 2010-11.
National Clean Energy Fund (NCEF)
66. There are many areas of the country where pollution levels have reached
alarming proportions. While we must ensure that the principle of "polluter pays"
remains the basic guiding criteria for pollution management, we must also give a
positive thrust to development of clean energy. I propose to establish a National
Clean Energy Fund for funding research and innovative projects in clean energy
technologies. I shall outline the mode of funding for this initiative in Part B of my
Effluent Treatment Plant, Tirupur
67. The textile cluster for knitwear in Tirupur in Tamil Nadu is a major
contributor to the country's hosiery exports. I propose to provide a one-time grant
of Rs.200 crore to the Government of Tamil Nadu towards the cost of installation
of a zero liquid discharge system at Tirupur to sustain this industry, which
provides livelihood to lakhs of persons, without undermining the environment.
Special Golden Jubilee Package for Goa
68. I propose to provide a sum of Rs.200 crore as a Special Golden Jubilee
package for Goa to preserve the natural resources of the State by restoring Goa's
beaches which are prone to erosion, and increasing its green cover through
National Ganga River Basin Authority (NGRBA)
69. The "Mission Clean Ganga 2020" under the National Ganga River Basin
Authority (NGRBA) with the objective that no untreated municipal sewage or
industrial effluent will be discharged into the national river has already been
initiated. I propose to double the allocation for NGRBA in 2010-11 to Rs.500 crore.
70. I am happy to inform the Honourable Members that schemes on bank
protection works along river Bhagirathi and river Ganga-Padma in parts of
Murshidabad and Nadia district of West Bengal have been included in the
Centrally Sponsored Flood Management Programme. I also propose to provide
budgetary support for drainage scheme of Kaliaghai-Kapaleswari Baghai basin in
the district of Purba and Paschim Midnapore, and Master Plan of Kandi subdivision
in Murshidabad, West Bengal.
71. Recognising the need for developing an alternate port facility in West
Bengal, it is proposed to develop a project at Sagar Island. Necessary funds will
be provided in due course.
72. For the UPA Government, inclusive development is an act of faith. In the
last five years, our Government has created entitlements backed by legal
guarantees for an individual's right to information and her right to work. This has
been followed-up with the enactment of the right to education in 2009-10. As the
next step, we are now ready with the draft Food Security Bill which will be placed
in the public domain very soon. To fulfil these commitments the spending on
social sector has been gradually increased to Rs.1,37,674 crore which now stands
at 37 per cent of the total plan outlay in 2010-11. Another 25 per cent of the plan
allocations are devoted to the development of rural infrastructure. With growth
and the opportunities that it generates, we hope to further strengthen the process
of inclusive development.
73. The Right of Children to Free and Compulsory Education Act, 2009 creates
a framework for legal entitlements for all children in the age group of 6 to 14 years
to education of good quality, based on principles of equity and
non-discrimination. In recent years, Sarva Shiksha Abhiyan (SSA) has made
significant contribution in improving enrolment and infrastructure for elementary
education. About 98 per cent of habitations are now covered by primary schools. I
propose to increase the plan allocation for school education from Rs.26,800 crore
in 2009-10 to Rs.31,036 crore in 2010-11. In addition, States will have access to
Rs.3,675 crore for elementary education under the Thirteenth Finance
Commission grants for 2010-11.
74. An Annual Health Survey to prepare the District Health Profile of all
Districts shall be conducted in 2010-11. The findings of the Survey should be of
immense benefit to major public health initiatives particularly the National Rural
Health Mission, which has successfully addressed the gaps in the delivery of
critical health services in rural areas.
75. I propose to increase the plan allocation for the Ministry of Health and
Family Welfare, from Rs.19,534 crore to Rs.22,300 crore for 2010-11.
76. To reach the benefits of banking services to the 'Aam Aadmi', the Reserve
Bank of India had set up a High Level Committee on the Lead Bank Scheme. After
careful assessment of the recommendations of this Committee, and in further
consultation with the RBI, it has been decided to provide appropriate Banking
facilities to habitations having population in excess of 2000 by March, 2012. It is
also proposed to extend insurance and other services to the targeted
beneficiaries. These services will be provided using the Business Correspondent
and other models with appropriate technology back up. By this arrangement, it is
proposed to cover 60,000 habitations.
Financial Inclusion Fund (FIF) and the Financial Inclusion Technology Fund
77. In 2007-08 the Government had set up a Financial Inclusion Fund and a
Financial Inclusion Technology Fund in NABARD, to reach banking services to the
unbanked areas. To give momentum to the pace of financial inclusion, I propose
an augmentation of Rs.100 crore for each of these funds, which shall be
contributed by Government of India, RBI and NABARD.
78. In the words of Mahatma Gandhi "Just as the universe is contained in the
self, so is India contained in the villages". For UPA Government, development of
rural infrastructure remains a high priority area. For the year 2010-11, I propose to
provide Rs.66,100 crore for Rural Development.
79. Mahatma Gandhi National Rural Employment Guarantee Scheme has
completed four years of implementation during which it has been extended to all
districts covering more than 4.5 crore households. The allocation for NREGA has
been stepped up to Rs.40,100 crore in 2010-11. Bharat Nirman has made a
substantial contribution to the upgradation of rural infrastructure through its
various programmes. For the year 2010-11, I propose to allocate an amount of
Rs.48,000 crore for these programmes.
80. Indira Awas Yojana is a popular rural housing scheme for weaker sections.
Taking note of the increase in the cost of construction, I propose to raise the unit
cost under this scheme to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly
areas. For the year 2010-11, the allocation for this scheme is being increased to
81. As a part of the strategy to bridge the infrastructure gap in backward
districts of the country, the Backward Region Grant Fund has proved to be an
effective instrument. I propose to enhance the allocation to this fund by 26 per
cent from Rs.5,800 crore in 2009-10 to Rs.7,300 crore in 2010-11. I have also
provided an additional central assistance of Rs.1,200 crore for drought mitigation
in the Bundelkhand region in the Budget.
Urban Development and Housing
82. "Swarna Jayanti Shahari Rozgar Yojana" designed to provide employment
opportunities in urban areas, has been strengthened with focus on community
participation, skill development and self employment support structures. For the
year 2010-11, I propose to increase the allocation for urban development by more
than 75 per cent from Rs.3,060 crore to Rs.5,400 crore. In addition, the allocation
for Housing and Urban Poverty Alleviation is also being raised from Rs.850 crore
to Rs.1,000 crore in 2010-11.
83. While presenting the Union Budget for the year 2009-10, I had announced
a Scheme of one per cent interest subvention on housing loans up to Rs.10 lakhs
where the cost of the house does not exceed Rs.20 lakhs. I propose to extend this
Scheme up to March 31, 2011. Accordingly, I propose to provide a sum of Rs.700
crore for this Scheme for the year 2010-11.
84. The Rajiv Awas Yojana (RAY) for slum dwellers and urban poor was
announced last year to extend support to States that are willing to provide
property rights to slum dwellers. This scheme is now ready to take off. I propose
to allocate Rs.1,270 crore for 2010-11 as compared to Rs.150 crore last year. This
marks an increase of over 700 per cent. The Government's efforts in the
implementation of RAY would be to encourage the States to create a slum free
India at the earliest.
Micro, Small & Medium Enterprises
85. Micro, Small and Medium Enterprises (MSMEs) contribute 8 per cent of the
country's GDP, 45 per cent of the manufactured output and 40 per cent of our
exports. They provide employment to about 6 crore persons through 2.6 crore
enterprises. To resolve a number of issues which affect the growth of this sector,
Prime Minister constituted a High-Level Task Force which held detailed
discussions with all stake holders and drew up an agenda for action. A High Level
Council on Micro and Small Enterprises will monitor the implementation of the
recommendations and the agenda for action. I propose to raise the allocation for
this sector from Rs.1,794 crore to Rs.2,400 crore for the year 2010-11.
86. A loan agreement for US $ 150 million has been signed between the
Government of India and the Asian Development Bank on 22nd December, 2009
for implementing the comprehensive Khadi Reforms Programme. This programme
will cover 300 selected Khadi institutions.
87. The programme for linking Self Help Groups (SHGs) with the banking
system has emerged as the major micro-finance initiative in the country. It was redesignated
as the 'Micro-Finance Development and Equity Fund' in 2005-06 with a
corpus of Rs.200 crore. The fund corpus is being doubled to Rs.400 crore in 2010-
National Social Security Fund for unorganised sector workers
88. Recognising the need for providing social security to the workers in the
unorganised sector, and as a follow up to the Unorganised Sector Workers Social
Security Act, 2008, it has been decided to set up a National Social Security Fund
for unorganised sector workers with an initial allocation of Rs.1,000 crore. This
fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi
89. The Government had launched Rashtriya Swasthya Bima Yojana on
October 1, 2007 to provide health insurance cover to below poverty line workers
and their families. It became operational on April 1, 2008 and so far more than 1
crore smart cards have been issued under this scheme. In view of the success of
the scheme, it is now proposed to extend its benefits to all such Mahatma Gandhi
NREGA beneficiaries who have worked for more than 15 days during the
preceding financial year.
90. To encourage the people from the unorganised sector to voluntarily save
for their retirement and to lower the cost of operations of the New Pension
Scheme (NPS) for such subscribers, Government will contribute Rs.1,000 per year
to each NPS account opened in the year 2010-11. This initiative, "Swavalamban"
will be available for persons who join NPS, with a minimum contribution of
Rs.1,000 and a maximum contribution of Rs.12,000 per annum during the financial
year 2010-11. The scheme will be available for another three years. Accordingly, I
am making an allocation of Rs.100 crore for the year 2010-11. It will benefit about
10 lakh NPS subscribers of the unorganised sector. The scheme will be managed
by the interim Pension Fund Regulatory and Development Authority.
91. I also appeal to the State Governments to contribute a similar amount to
the scheme and participate in providing social security to the vulnerable sections
of the society.
92. Prime Minister's Council on National Skill Development has laid down the
core governing principles for operating strategies for skill development. The
Council has a mission of creating 50 crore skilled people by 2022. Of these, the
target for the National Skill Development Corporation, which has started
functioning from October, 2009, is 15 crore. It has completed a comprehensive
skill gap study of 21 high growth sectors and approved three projects worth about
Rs.45 crore to create 10 lakh skilled manpower at the rate of one lakh per annum.
Other projects are in advanced stages of consideration.
93. It is proposed to launch an extensive skill development programme in the
textile and garment sector by leveraging the strength of existing institutions and
instruments of the Textile Ministry. The resources of the private sector will also be
harnessed by incentivising training through an outcome - based approach.
Through these instruments, the Ministry of Textiles has set an ambitious target of
training 30 lakh persons over 5 years.
94. I propose to step up the plan outlay for Women and Child Development by
almost 50 per cent. Several new initiatives that were launched in 2009-10 are now
ready for implementation. A mission for empowerment of women is being set up.
The ICDS platform is being expanded for effective implementation of the Rajiv
Gandhi Scheme for Adolescent Girls.
95. To further improve female literacy rate, the Government has recast the
earlier National Literacy Mission as a new programme "Saakshar Bharat". It was
launched in September, 2009 with a target of 7 crore non-literate adults which
includes 6 crore women.
96. A Mahila Kisan Sashaktikaran Pariyojana to meet the specific needs of
women farmers is being launched. I have provided Rs.100 crore for this initiative
as a sub-component of the National Rural Livelihood Mission.
97. I am happy to inform the Honourable Members that I propose to enhance
the plan outlay of the Ministry of Social Justice and Empowerment to Rs.4500
crore. This amounts to an increase of 80 per cent as compared to 2009-10. This
will support the programmes being implemented for the target population groups
covering the Scheduled Castes, Other Backward Classes, persons with
disabilities, senior citizens and victims of alcoholism and substance abuse. With
this enhancement, the Ministry will be able to revise rates of scholarship under its
post-matric scholarship schemes for SCs and OBC students, which is long
98. The allocation will also assist in establishing an Indian Sign Language
Research and Training Centre for the benefit of the hearing impaired. District
Disability Rehabilitation Centres are being set up in 50 additional districts along
with two composite regional centres for persons with disabilities.
99. I also propose to raise the plan allocation for the Ministry of Minority
Affairs from Rs.1,740 crore to Rs.2,600 crore for the year 2010-11. This marks an
increase of nearly 50 per cent. I am happy to inform the Honourable Members that
we are close to achieving the target of 15 per cent priority sector lending to
minorities in the current year. This will be maintained for the next three years.
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