The Union Budget for 2005-06, introduced by Finance Minister P Chidambaram in Parliament on February 28, 2005, has several provisions directly or indirectly related to alleviating poverty and improving the quality of life of the poor.

Key provisions discussed briefly below are:
• Increased allocation for Food for Work Programme
• Launch of National Rural Health Mission
• Increased coverage of Antyodaya Anna Yojana
• Increased coverage of Integrated Child Development Services (ICDS) and Midday Meal Scheme
• Sarva Shiksha Abhiyan strengthened
• Increased provision for rural drinking water and sanitation
• Education support for SC/ST students
• New concept of ‘gender budgeting’ introduced
• Backward Regions Grant Fund established
• More assistance for Bihar
• Continued corpus for Rural Infrastructure Development Fund
• Involvement of SHGs in micro financing
• Greater role for micro finance institutions, newly designated enhanced fund
• A knowledge centre for every village
• More funds for Indira Awas Yojana
• Bharat Nirman programme to build rural India

Food for Work Programme

The programme, which comprises a cash component and foodgrain component, was launched in November 2004 with an allocation of Rs 4,020 crore in 2004-05. In 2005-06, the cash component has been increased to Rs 5,400 and the foodgrain component to 50 lakh MT, taking the overall allocation to over Rs 11,000 crore. This scheme will be converted into the National Rural Employment Guarantee Scheme.

National Rural Health Mission (NRHM)

This is a new programme to be launched in 2005-06. The NRHM aims at strengthening primary healthcare through grassroots-level public health intervention. Increased allocations will go towards the training of health volunteers, more medicines, and strengthening the primary and community health system. The departments of health and family welfare have been given a higher allocation of Rs 10,280 crore, against Rs 8,420 crore in 2003-04.

Antyodaya Anna Yojana

The number of families covered under the Antyodaya Anna Yojana will be increased from the current 2 crore below-the-poverty-line (BPL) families to 2.5 crore BPL families in 2005-06.

Integrated Child Development Services

The number of anganwadi centres under the Integrated Child Development Services (ICDS) will be increased from the current 649,000 by another 188,168, so that every settlement has an anganwadi providing full coverage to all children. Supplementary nutrition norms will be doubled; the Centre will share half the cost. Allocations will be increased from Rs 1,623 crore in 2004-05 to Rs 3,142 crore in 2005-06.

Midday Meal Scheme

The Midday Meal Scheme, which presently covers 11 crore children, is to be strengthened with additional resources. Allocations will be increased from Rs 1,675 crore in 2004-05 to Rs 3,010 crore in 2005-06.

Sarva Shiksha Abhiyan

The Sarva Shiksha Abhiyan, which focuses on primary education for all children, has been strengthened through a non-lapsable fund called the Prarambhik Shiksha Kosh. Total fund allocation has been enhanced from Rs 4,754 crore in 2004-05 to Rs 7,156 crore in 2005-06.

Drinking water and sanitation

All drinking water schemes have been consolidated under the Rajiv Gandhi National Drinking Water Mission. Allocation for enhancing the coverage of drinking water availability and improving water quality under the Mission is being increased to Rs 4,750 crore in 2005-06, from Rs 3,300 crore in 2004-05. As a result, 2.16 lakh habitations will be covered in Andhra Pradesh, Rajasthan, Gujarat, Karnataka and West Bengal.

Only 30% of rural households today have access to sanitation facilities. Allocations in this sector have been increased to Rs 630 crore, in order to extend the Total Sanitation Campaign to all districts from the present 452 districts.

Education support for SCs and STs

In addition to the ongoing three scholarship schemes for SC/ST students in the pre-Matric, post-Matric and merit categories, a new scholarship is planned for SC/ST students who gain admission into notified institutes of excellence. The scholarship will cover tuition fees, living expenses, books and a computer.

A new programme, called the Rajiv Gandhi National Fellowship, will be introduced for SC/ST students who wish to pursue MPhil and PhD courses at select universities. Allocations will be made for 2,000 such fellowships from 2005-06 onwards. The fellowships will be patterned along the lines of the UGC fellowship programme.

Gender budgeting

A new concept of ‘gender budgeting’ has been introduced in the Union budget, with a separate statement highlighting the gender sensitivities of budgetary allocations under 10 demands for grants. All departments will be expected to present gender budgets and make a benefit-incidence analysis.

Backward Regions Grant Fund

The Backward Regions Grant Fund is a new fund established to provide additional support to 170 identified backward districts in the country. A yearly allocation of Rs 5,000 crore, over the next four years, has been earmarked for this purpose. The money can be utilised only where panchayati raj institutions are in place and functioning. This fund will replace the Rashtriya Sam Vikas Yojana (RSVY), which was scheduled to be wound up in 2006-07, and will take care of all districts covered under the RSVY.

Additional grants for Bihar

In addition to special assistance under the RSVY for Bihar (along with Jammu and Kashmir and the north-eastern region), and assistance under the Backward Regions Grant Fund, Bihar will receive grants amounting to Rs 7,975 crore from the 12th Finance Commission for the period 2005-10. Special grants for health and education have also been earmarked for the state.

Rural Infrastructure Development Fund

The Rural Infrastructure Development Fund, meant to provide basic infrastructure for the poor in rural India and urban slums, will continue to receive a corpus of Rs 8,000 crore in 2005-06.

Credit linking through self-help groups

Micro financing through self-help groups (SHGs), which has been successfully implemented in recent times, is to be enhanced. The number of SHGs involved in the process will be increased from the current 2 lakh to 2.5 lakh. At present, 560 banks, including 48 commercial banks, 96 regional rural banks and 316 cooperative banks conduct micro financing programmes through SHGs.

Micro finance institutions to be strengthened

The existing Micro Finance Development Fund is to be re-designated the Micro Finance Development and Equity Fund, with its corpus raised from the present Rs 100 crore to Rs 200 crore. This is being done to infuse more capital into micro finance institutions and also institutionalise them. MFIs serve as intermediaries between banks and low-income households and small-scale informal businesses. The plan is to identify MFIs, classify and rate them and empower them to serve as more effective intermediaries. MFIs are also being seen as ‘banking correspondents’, providing transaction services on behalf of commercial banks.

Rural Knowledge Centres

A sum of Rs 100 crore from the Rural Infrastructure Development Fund (RIDF), has been earmarked for the setting up of fully empowered (with information and communication technology) Rural Knowledge Centres in every village, by 2007. This will be done with the involvement of 80 organisations including civil society organisations. Funds from the RIDF will be routed through NABARD.

Indira Awas Yojana

Indira Awas Yojana, the housing scheme for the rural poor, is being allocated Rs 2,750 crore for 2005-06, up from the current Rs 2,500 crore. Under the programme, around 15 lakh houses will be constructed in 2005-06.

Bharat Nirman

By 2009 the government proposes to strengthen rural infrastructure by way of irrigation, roads, water supply, housing, rural electrification and telecom connectivity, under the Bharat Nirman programme. The programme, which has been conceived as a business plan, aims to:

• bring an additional 1 crore hectares under assured irrigation
• connect all villages with a population of over 1,000 (or 500 in hilly/tribal areas) with a road
• construct 60 lakh additional houses for the poor
• provide drinking water to the 74,000 habitations that have not yet been covered
• provide electric connections to 125,000 villages that are not yet electrified, reaching electricity to a further 2.3 crore households
• providing telephone connectivity to the remaining 66,822 villages.

Panchayati raj institutions will be involved in the planning and implementation of the Bharat Nirman programme.