India’s Budget 2007-08, introduced by Finance Minister P Chidambaram in Parliament on February 28, 2007, claims to be aimed at “faster and more inclusive growth,” a slogan adopted by the Eleventh Five-Year Plan that begins in April 2007.

Accordingly, increased outlays have been made for rural infrastructure programmes under Bharat Nirman, social sector programmes and under various heads for agriculture. A new insurance scheme has been launched for rural landless households.

Bharat Nirman

Allocation for the Bharat Nirman programme for upgrading rural infrastructure has gone up by 31.6% from Rs 18,696 crore to Rs 24,603 crore.

In the two years since Bharat Nirman was launched, around 12,198 km of rural roads have been completed, 783,000 rural houses have been constructed, and 914,000 houses are under construction. Some 19,758 villages have been covered so far under the Rajiv Gandhi Grameen Vidyutikaran Yojana, and 15,054 villages have been provided with a telephone against the target of 20,000 villages.

Sarva Shiksha Abhiyan (SSA): School education has been given primacy with an increase in allocation of 35%, from Rs 17,133 crore to Rs 23,142 crore. Of this, Rs 10,671 crore will be for the SSA. Teachers’ training institutions are to be strengthened with an increase in budget from Rs 162 crore to Rs 450 crore. Around 200,000 more teachers will be appointed in 2008, and 500,000 more classrooms constructed.

The midday meal scheme gets Rs 7,324 crore. Children in upper primary classes in 3,427 educationally backward blocks will also be covered. The transfer to Prarambhik Shiksha Kosh will increase from Rs 8,746 crore to Rs 10,393 crore. To increase access to secondary education, the outlay has been doubled from Rs 1,837 crore to Rs 3,794 crore.

Means-cum-merit scholarships: The SSA has increased the enrolment rate in schools to 96%, but the dropout rate continues to be high. To address this, a National Means-cum-Merit Scholarship will be introduced. The selection of students will be through a national test for students who have passed Class VIII. Each student will be given Rs 6,000 per year, and 100,000 scholarships will be awarded every year. A corpus fund of Rs 750 crore will be created this year, and augmented by a similar amount annually over the next three years.

Drinking water and sanitation: Some 55,512 habitations and 34,000 schools have been provided drinking water till December 2006, under the Rajiv Gandhi Drinking Water Mission. More ambitious targets have been set for 2007-08 to deal with both non-coverage and slippage. Allocation for the Mission has been enhanced from Rs 4,680 crore in 2006-07 to Rs 5,850 crore in 2007-08. For the Total Sanitation Campaign, the allocation has gone up from Rs 720 crore to Rs 954 crore.

National Rural Health Mission (NRHM): All districts have to complete preparation of their District Health Action Plans by March 2007. There is to be a major emphasis on mother and child care and on prevention and treatment of communicable diseases. Convergence is sought to be achieved among various programmes such as immunisation, antenatal care, nutrition and sanitation through Monthly Health Days (MHD) organised at anganwadi centres.

So far, 320,000 Associated Social Health Activists (ASHAs) have been recruited and more than 200,000 have been given orientation training. Already 90,000 link workers have been selected by the states. AYUSH (alternative) systems are being mainstreamed into the health delivery system at all levels. Allocation for the National Rural Health Mission (NRHM) has been increased from Rs 8,207 crore to Rs 9,947 crore.

HIV/AIDS: NACP-III (third National AIDS Control Programme) will start in 2007-08, to target high-risk groups. Access to condoms is to be expanded and universal access to blood screening and safe blood is to be ensured. More hospitals are to provide treatment to prevent transmission of HIV/AIDS from mother to child. Provision for the AIDS control programme will be Rs 969 crore.

Polio: The polio-eradication strategy is to be revised since the outbreak of polio in Uttar Pradesh last year was a setback. Thus the number of polio rounds will be increased and the monovalent vaccine introduced with intensive coverage in 20 high-risk districts of Uttar Pradesh and 10 districts of Bihar. The programme has been integrated into the NRHM. ASHAs and anganwadi workers will visit every household and track down every child for the immunisation programme. To achieve the goal of eliminating polio, a provision of Rs 1,290 crore has been made for 2007-08.

Integrated Child Development Services (ICDS): The scheme will cover all habitations and settlements during the Eleventh Plan and reach out to pregnant women, lactating mothers and all children below the age of six. Allocation has been increased from Rs 4,087 crore to Rs 4,761 crore.

National Rural Employment Guarantee Scheme (NREGS): Allocation for the NREGS is Rs 12,000 crore, but since it is a demand-driven scheme the budget will be supplemented as required. The scheme has been expanded to cover 330 districts. An additional amount of Rs 2,800 crore has been provided for the Sampoorna Gramin Rozgar Yojana in districts not covered by the NREGS.

Swaranjayanti Gram Swarozgar Yojana (SGSY): Allocation for the SGSY, aimed at promoting self-employment among the rural poor through self-help groups, is to increase from Rs 1,200 crore to Rs 1,800 crore.

Urban unemployment: Allocation for the Swarna Jayanti Shahari Rojgar Yojana has increased from Rs 250 crore in the current financial year to Rs 344 crore.

Jawaharlal Nehru National Urban Renewal Mission: A total of 538 projects with a cost of Rs 23,950 crore have been sanctioned in areas such as water, sanitation, transport, and roads in many cities. Allocation for the Mission has been increased from Rs 4,595 crore to Rs 4,987 crore.

Targeted Public Distribution System (PDS) and Antyodaya Anna Yojana: A scheme to evaluate, monitor, manage and strengthen the targeted PDS will be implemented in 2007-08. This will include computerisation of the PDS and an integrated information system in the Food Corporation of India.

Scheduled castes and scheduled tribes (SC/STs): Allocation of Rs 3,271 crore has been made for schemes benefiting only SCs and STs, and Rs 17,691 crore for schemes with at least 20% of benefits earmarked for SCs and STs.

There is an increase in allocation for the Rajiv Gandhi National Fellowship Programme, from Rs 35 crore to Rs 88 crore. Provision for post-matric scholarships has been increased from Rs 440 crore to Rs 611 crore. A separate provision of Rs 91 crore has been proposed for similar scholarships to students belonging to socially and educationally backward classes.

Minorities: Share capital of the National Minorities Development and Finance Corporation is to be increased to Rs 63 crore. Provision of Rs 108 crore has been made for a multi-sector development programme in districts with a concentration of minorities.

For the three scholarship programmes for minority community students, allocation for pre-matric scholarships is Rs 72 crore, and for post-matric scholarships, Rs 90 crore. Merit-cum-means scholarships at the graduate and post-graduate levels will receive Rs 48.60 crore.

Women: The outlay for 100% women-specific programmes is Rs 8,795 crore, and for schemes where at least 30% allocation is for women-specific programmes it is Rs 22,382 crore. Fifty ministries/departments have set up gender budgeting cells.

AGRICULTURE

While manufacturing and services have registered good growth, agriculture has shown poor growth of just 2.3% during the Tenth Five-Year Plan period. This, together with the large number of suicides by debt ridden farmers has forced the government to incorporate measures in the budget to improve the agriculture sector. They are:

Farm credit: In the year ending December 2006, 53.37 lakh new farmers were brought into the institutionalised credit system. The target for 2007-08 is set at Rs 225,000 crore with an addition of 50 lakh new farmers accessing credit.

The 2% interest subvention scheme for short-term crop loans will continue, with a provision of Rs 1,677 crore.

A special plan is being implemented over a period of three years in 31 most distressed districts in four states involving a total amount of Rs 16,979 crore. Of this, about Rs 12,400 crore is to be spent on water-related schemes. The plan includes a scheme for the induction of high-yielding milch animals and related activities to enhance livelihood options.

The issue of rural indebtedness is being studied by a government appointed committee headed by Dr R Radhakrishna. The government will act on the report when it is submitted.

Mission for pulses: To address the critical deficiency in the availability and quality of certified seeds, the Integrated Oilseeds, Oil palm, Pulses and Maize Development Programme is to be expanded with sharper focus on scaling up the production of breeder, foundation and certified seeds. Government will fund the expansion of the Indian Institute of Pulses Research, Kanpur, and offer other producers a capital grant or concessional financing to double production of certified seeds within a period of three years.

Plantation sector: Financial mechanisms for re-plantation and rejuvenation will be put in place for coffee, rubber, spices, cashew and coconut, and a special Tea Fund has been launched to rejuvenate the tea sector.

Accelerated Irrigation Benefit Programme: Additional irrigation potential of 2,400,000 hectares, including 900,000 hectares under the Accelerated Irrigation Benefit Programme (AIBP), will be created. The outlay is to be increased from Rs 7,121 crore to Rs 11,000 crore including a grant component to state governments of Rs 3,580 crore, an increase from Rs 2,350 crore.

Rainfed Area Development Programme: The National Rainfed Area Authority was established last year to coordinate all schemes relating to watershed development and other aspects of land use. An amount of Rs 100 crore has been provided for the new Rainfed Area Development Programme.

Water resources management: In March 2005, a pilot project was launched to restore and rejuvenate waterbodies in 13 states. The World Bank signed a loan agreement with the Tamil Nadu state government for Rs 2,182 crore to restore 5,763 waterbodies with a command area of 400,000 hectares. An agreement with the Andhra Pradesh government is expected to be concluded in March 2007 to cover 3,000 waterbodies with a command area of 250,000 hectares.

Groundwater recharge: The government will provide 100% subsidy to small and marginal farmers and 50% subsidy to other farmers to recharge groundwater by diverting rainwater into ‘dug wells’. The scheme is to be finalised by the ministry of water resources and Rs 1,800 crore will be transferred to NABARD to be distributed through lead banks in the districts to beneficiaries.

Training of farmers: The Indian Council of Agricultural Research (ICAR) is to set up one teaching-cum-demonstration model of water harvesting in each of 32 selected state agricultural universities and ICAR institutes. Each institution will train 100 trainers and 1,000 farmers every year. An interest-free loan of Rs 3 crore will be provided to each institution to create a corpus fund.

Extension system: A new programme is to be drawn up that will replicate the earlier Training and Visit (T&V) programme that ushered in the Green Revolution.

The Agriculture Technology Management Agency (ATMA), now in place in 262 districts, will be extended to another 300 districts. Provision for ATMA will be increased from Rs 50 crore to Rs 230 crore.

Fertiliser subsidies: Based on a study to be conducted, a pilot programme will be implemented in at least one district in each state for delivery of subsidy directly to the farmer. The amount of the subsidy has been increased from Rs 17,253 crore to Rs 22,452 crore.

Agricultural insurance: The National Agricultural Insurance Scheme (NAIS) will be continued for the 2007-08 kharif and rabi seasons with a provision of Rs 500 crore. A weather-based crop insurance scheme will be started by the Agricultural Insurance Corporation on a pilot basis as an alternative to NAIS with an allocation of Rs 100 crore for 2007-08.

National Bank for Agriculture and Rural Development (NABARD): To augment its resources for refinancing rural credit cooperatives, NABARD will issue government-guaranteed rural bonds to the extent of Rs 5,000 crore, with suitable tax exemption.

Rural Infrastructure Development Fund (RIDF): The fund sanctions and disburses funds to state governments. It sanctioned Rs 8,440 crore out of a corpus of 10,000 crore in 2006-07. The corpus is to be raised to Rs 12,000 crore. A separate window for rural roads will continue, with a corpus of Rs 4,000 crore. In 2006-07, projects worth Rs 2,311 crore were sanctioned.

Insurance for rural landless households: A new scheme called the Aam Admi Bima Yojana is to be introduced to provide death and disability insurance cover through the Life Insurance Corporation (LIC) to rural landless households.

The head of the family, or one earning member in a family, will be insured. The government will bear 50% of the premium of Rs 200 per year per person. An amount of Rs 1,000 crore will be placed in a fund to be maintained by LIC.