The Hindu Business Line : Highlights of Budget 2006-07

NEW DELHI: Following are the highlights of the Union Budget for 2006-07 presented in the Lok Sabha by the Finance Minister, Mr P Chidambaram, on Tuesday.

Government aims for 10 per cent economic growth.

GDP growth to be 8.1 per cent this year with manufacturing growing at 9.4 per cent and agriculture bouncing back to 2.6 per cent with all sectors doing well.

With over 7.5 per cent growth in the last three years, it is possible that the average annual growth will be over seven per cent in the 10th plan.

Government's aim is to ensure monetary stability and managing external debt.

Rs 11,700 crore to be spent on rural employment in the current year.

Several indicators point to buoyancy in capital formation in the current year.

Highway construction speeded up, progressing at 4.48 kms per day as against 1.86 kms in 2004.

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. Rs 944 crore released this year under the Accelerated Irrigated Benefit Programme.

Allocation on education increased by 31.5 per cent to over Rs 24,150 crore and for healthcare raised by 22 per cent to Rs 12, 546 crore.

Entire Rs 1,100 crore for rural electrification released this year and 10,366 villages to be electrified.

Five lakh additional class-rooms to be constructed and 1.5 lakh additional teachers to be appointed.

Larger budgetary support to Bharat Nirmal Programme. Rs 18,696 crore to be given, which represents a hike of 54 per cent.

Total budget for northeastern region will be Rs 12,041 crore including Rs 1,350 crore for the ministry of northeast 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 4,813 crore next fiscal as against Rs 3,014 crore this year.

Gross budgetary support for annual plan expenditure has been raised to Rs 1,74,725 crore for 2006/07 as against Rs 1,43,497 crore, an increase of 20.4 per cent. Likewise for the central plan increased to Rs 1,31,285 crore next fiscal as against Rs 1,10,3 85 crore in the current year.

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 in 2006/07 as against Rs 34,927 crore in the current year.

Old age pension to be increased to Rs 200 per month for above 75 years of age. Allocation for it put at Rs 1,430 crore from the Centre and the State government to provide matching contribution.

Rajiv Gandhi drinking water programme to get Rs 4,680 crore next year as against Rs 3,645 crore this year.

National Health Mission allocation increased to Rs 8,207 crore in next fiscal from Rs 6,553 crore this year.

Rs 14,300 crore for rural employment programme during 2006/07, out of which Rs 11,300 crore for NREG programme and Rs 3,000 crore for SGRY.

New towns to be established on specific themes.

Rs 28,737 crore has been allocated for gender budgeting under various heads.

Special schemes 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 for greater financial support to organisations involved in minority welfare.

Allocation for national Urdu education programme increased to Rs 13 crore from Rs 10 crore this year.

One thousand schools for girls of SCs, STs, OBCs and minorities to be set up.

A girl child will get Rs 3,000 deposited in a bank account after she enrolls for eighth class examination and the amount would be given when she becomes a major.

Separate window for tenant farmers to ensure loan share. Agri credit proposed to be increased to Rs 1,75,000 crore next year, as against Rs 1,41,500 crore, covering additional 50 lakh farmers.

Farmers to receive short-term credit at 7 per cent.

Budgetary loan for PSEs has been fixed at Rs 16,901 crore including Rs 2,791 for Railways.

The performance budget based on the first outcome budget presented last year will be tabled by the end of the budget session. The outcome budget for 2006-07 will be presented before March 17 this year.

Agricultural insurance scheme to continue. Tea fund to get initial contribution of Rs 100 crore for tea growing states.

FDI flow put at $4 billion up to November 2005 without counting the re-investment and the liberalised regime this year is expected to increase the flow substantially in the coming year.

Central horticulture institute to set up in Nagaland and a national fisheries development board will also to be set up.

Rs 4,481 crore allocated for improving 20,000 water bodies in the coming year. This would provide irrigation to 14.7 lakh hectares of command areas. Multilateral agencies to be approached for funding.

Two per cent of the borrowers interest liability up to Rs one lakh principal of crop loans taken for kharif and rabi this year is to be reimbursed to farmers before March 31 this year as an exceptional gesture. This would cost the exchequer Rs 1,700 cror e.

Allocation for Rural Infrastructure Development Fund has been stepped up to Rs 10,000 crore in 2006/07.

Textile up-gradation fund allocation to be raised to Rs 55 crore in 2006-07 from Rs 455 crore following good response in the last two years. The Government also announced setting up of 12 textile industry parks of which 7 have been approved and ten more in the pipeline. An allocation of Rs 189 crore provided for this. A National Jute Board to be set up. Like wool mark, there will be a handloom mark to certify its quality.

A window to be created for equity participation and viability gap funding for the growth of sunrise IT sector. The window to be kept open for three years.

Food Processing Sector would be treated as a priority sector for bank credit.

Services sector put on par with manufacturing sector.

SMEs in service sector to get the status of SSI in manufacturing sector. To fund them a corpus will be raised by SIDBI for Rs 2,500 crore from the present Rs 1,122 crore in the next five years.

An empowered group of ministers to be set up for the development of industrial clusters in the country.

India's foreign tourist arrivals increased to 3.92 million last year. Fifteen tourist development circuits identified for development.

Four new institutes of hotel management will be set up in Chhattisgarh, Haryana, Jharkhand and Uttaranchal.

Rs 1,500 crore to be allocated for Universal Services obligations Fund under the telecom sector.

A Bill on cellular telephony in rural areas to be brought in Parliament by the Communications Ministry.

40,000 more villages to be electrified under Rajiv Gandhi Gramin Vidhyutikaran Yojana.

82 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 t o be installed by March 2007. Five mega power projects of Rs 4,000 crore 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 Mahar ashtra, 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, Visakhapatnam and Kolkata.

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.

Rs 50 crore each to be given to universities of Calcutta, Mumbai and Madras for celebrating their 150th year of existence.

Rs 100 crore 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 allocated in 2006-07.

The defence budget raised to Rs 89,000 crore in 2006-07 from Rs 83,000 crore in the current year. Of this Rs 37,458 crore would be capital expenditure.

Special assistance of Rs 848 crore for Jammu and Kashmir for its reconstruction fund, including Rs 230 crore for Baglihar project. This will be in addition to 2006-07 state plan of Rs 2,300 crore.

Rs 10 crore 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 five crore.

In the backdrop of C Rangarajan Committee report, Government urges for consensus in Parliament on subsidies in fertiliser, petrol and food.

Revenue deficit to be 2.1 per cent of GDP. Fiscal deficit 3.8 per cent of GDP in 2006-07.

After 20 years, the gross fiscal deficit is less that gross budgetary deficit. - PTI

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