Chidambaram presents Union Budget

Chidambaram presents Union Budget

Monday, February 28, 2005 (Mumbai):

Presenting UPA's second Union Budget, Finance Minister P Chidambaram today said the government is committed to the greatest good for the greatest number.

Chidambaram said the investment climate is buoyant for the next fiscal. And expects the economy to grow by 6.9 per cent in 2005-06 and the industry to grow by 8.9 per cent.

He reiterated the UPA government's commitment to employment generation, universal access to education and giving boost to manufacturing.

The Finance Minister announced that the Planning Commission has drawn up a tsunami relief programme costing Rs 10,260 crore. So far, Rs 3,644 crore have been provided for tsunami relief.

Disturbing trends

Despite high economic growth, there were several disturbing trends during 2004 when the UPA government came to power, Chidambaram said.

The economy had to face excess liquidity overhang, which spilled into 2004-05 and an inflationary build up because of oil prices increase, deficit in southwest monsoon and a decline in business confidence.

Inflation has been reined at 5.01 per cent as of February 12, 1 per cent less than what it was in the corresponding period last year, Chidambaram said.

The Finance Minister said the allocation for rural development would be Rs 18,334 crore.

In the space of nine months, "we have risen to challenges as outlined by the National Common Minimum Programme," Chidambaram said.

Fiscal targets

As against the target of Rs 1.05 lakh crore of Agricultural credit this fiscal, as much as Rs 1,08500 crore was disbursed.

While, as compared to the target of 1.85 lakh self help groups, the government has already achieved 2.26 lakh such groups as part of efforts to tackle poverty and unemployment.

The allocation for the health sector has been increased to Rs 10,280 crore for 2005-06 as against Rs 8420 crore in the current year.

The National Rural Health Scheme will be launched in the new fiscal.

The Antodya Anna Yojana Scheme coverage is being increased from two crores families to 2.5 crore families below poverty line.

Budgetary support

Gross budgetary support for plan during 2005-06 has been fixed at Rs 1,72,500 crore, an increase of 16.9 per cent over the current year's figure.

In the current year, it was originally fixed at 1,45,590 crore to which an additional Rs 2,000 crore was done.

Support for Central plan in the new financial year will be Rs 1,10,385 crore which, Chidamabram said, was very substantial and represent an unprecedented increase of over 25 per cent.

In the current year, the budget estimate was Rs 87,896 crore.

Two thousand fellowships will be awarded under the Rajiv Gandhi National Scholarship scheme for Scheduled Castes and Scheduled Tribes for pursuing courses like M Phil and Ph D.

Industrial boom

Outlining efforts of government to push up employment, Chidambaram said food processing is generating 2.5 lakh additional jobs.

He also informed the house, that textiles is generating 1.2 crore jobs, IT 70 lakh jobs by 2009 and construction industry lakhs of additional jobs in the face of industrial boom in the country.

He announced the national rural health mission will be launched next fiscal.

Six AIIMS-type medical institutions will start in different parts of the country in the near future.

Fertiliser subsidy has been pegged at Rs 16,254 crore while allocation for rural development is put at Rs 18,334 crore for 2005-06.

For Sarvashikha Abhiyan, the allocation has been raised to Rs 7156 crore.

Special plans

Focusing on states, a special plan assistance has been laid out to Jammu and Kashmir. And state plan has been hiked from Rs 3,008 crore to Rs 4,200 crore.

Bihar has been identified for special grant for health and education.

The Baglihar Hydel Project which was given Rs 300 crore last year would be given adequate funds next year.

For midday meal scheme covering 11 crore children, the budget estimate for the new year is increased to Rs 3,010 crore from Rs 1,675 crore in budget estimate for the current year.

For Rajiv Gandhi drinking water mission, the allocation has been increased to Rs 4750 crore in 2005-06 from Rs 3300 crore in the current year.

Observing that only 30 per cent of rural people enjoyed safe sanitation, Chidambaram said the scheme to provide proper sanitation facilities to all districts would get an allocation of Rs 630 crore this year.

Largesse scholarships to be provided for SC/ST students in select top class institutes, details of which would be announced shortly.

There will be greater credit flow for urban poor. Central assistance for recruitment and posting of Urdu teachers in primary and upper primary schools where majority of students speak that language.

Funds to be provided for minority community meritorious candidates appearing in competitive exams.

Rural development

An allocation of Rs 5000 crore for backward regions grant fund for 2005-06 and this allocation will continue for next four years.

Twelfth Finance Commission has provided Rs 7975 crore for 2005-10 for development of backward regions in Bihar.

Udhampur-Baramulla rail section to be completed on a priority basis while Rs 450 crore will be provided for Highway Development in North East.

Equity support of Rs 14040 crore and Rs 3554 crore for Central PSUs, including Railways.

New scheme launched

Launching Bharat Nirman Programme to give a new deal to rural India, Chidambaram announced the budget would lay stress on development of six areas -- irrigation, roads, water supply, rural electrification, housing and rural connectivity.

The proposal is to provide additional one crore hectare of irrigation, construct 60 lakh houses for poor, connect all villages with 1,000 population in plains and 500 in hilly areas with roads.

Also, drinking water to 74,000 remaining habitations and electricity for 1,25,000 remaining villages and telephone connectivity to 66,822 villages.

Agriculture diversification to cover fruits, vegetables, poultry, diary, pulses and oilseeds. National Horticulture Mission to be launched on April 1.

To improve the plantation sector, government has set up a committee to modify the price stabilisation fund which has proved to be ineffective. A massive tea plantation and rejuvenation scheme will be taken up.

Flood control

Pilot project to improve water bodies to be taken up at a cost of Rs 100 crore.

A plan out of Rs 180 crore fund will be set up for flood control and erosion in Eastern parts of UP, Bihar, West Bengal, Orissa and North-East on account of floods in Bramaputra and Ganga.

An additional Rs 52 crore will be allocated for Farakka Barage. This is being done on the basis of Task Force report submitted recently.

Rs 400 crore provided for stepping up micro-irrigation comprising drip and sprinkler irrigation.

So far 1.2 million hectares have been covered by micro irrigation in the country which is to be stepped up to 3 million hectares by the end of the 10th plan and 14 million hectares by the end of 11th plan.
(With PTI inputs)

from ndtv.com