Finance Minister Pranab Mukherjee has presented Budget 2009-10 in Parliament.
Beginning his Budget speech, Pranab first thanked the voters for reposing faith in the UPA government.
Here are the Budget highlights even as it’s presented in Parliament:
1. Total budget expenditure for 2009-10 will be Rs 10,28,032 cr
2. Plan expenditure, for both Centre and States, to go up by Rs 61,000 cr
3. Fiscal deficit in 2009-10 is proposed at 6.8 per cent of GDP
4. Higher public investment in infrastructure
5.Goods and Services Tax to be introduced from April 1, 2010
6. Defence outlay goes up
7. Total fiscal stimulus for 2008-09 amounts to Rs 1,86,000 cr
8. Strengthen the delivery mechanism for healthcare
9. Increase investment in infrastructure
10. Mandate for inclusive growth
11. Re-energise government and re institutionalise development
12. Challenege before UPA to return to 9 per cent growth
13. Aim to create 12 million jobs
14. Economic growth is a synergy of states and Centre
15. Integration of Indian economy with rest of the world
16. Significant hike in foreign capital
17. Govt took 3 stimulus packages to fight slowdown
18. Two worst quarters since September slowdown behind us
19. Signs of revival in the domestic industry
20. Fiscal stimulus gave economy a boost
21. New company IIFCL to look at infrastructure needs
22. IIFCL will also look at incremental lending by banks
23. GDP grew at 6.7 per cent
24. JNNURM allocation hiked by 87 per cent
25. Hike infrastructure investment to over 9% of GDP by 2014
26. Fund allocation for urban poor accommodation is 3,973,000 cr
27. Hike in allocation for Mumbai flood management
28. JNNURM allocation hiked by 87 per cent
29. NHAI allocation up by 23 per cent
30. IIFCL will also look at incremental lending by banks
31. New company IIFCL to look at infrastructure needs
32. Additional budget allocation to farmers
33. FIIs have returned to India in last few months
34. Target for agriculture credit raised to Rs 3,25,000 cr in 2009-10
35. Pranab Mukherjee quotes Kautilya in Budget speech
36. Export Credit Guarantee scheme extended till March 2010
37. Incentives in interest rates to farmers to pay back
38. An expert group will look into petroleum product pricing
39. Saral-II forms to simplify taxation process
40. Move towards energy security via Integrated Energy Act
41. Raise threshold for non-promoter public listed companies
42. Banking network to be expanded
43. NREGA gave employment opportunities to more than 4.479 cr households
44. Stimulus for print media extended till December 2009
45. Rs 39,100 crore allocation for NREGA
46. Indira Awaas Yojna hiked by 63% to Rs 8,883 cr, up 144 per cent
47. Rs 100 cr one-time grant to expand banks in 'unbanking' areas
48. Work on National Food Security scheme for subsidised food
49. Families below the poverty line will be entitled to 25 kg of rice or wheat per month at Rs 3 per kg
50. Rs 100 crore for pilot scheme for development of SC-dominated villages.
51. Aim to bring 50 per cent of all rural women under women’s self-help groups in five years and link them to banks.
52. Aim to reduce female illiteracy by half. The scheme will focus on the minorities, SCs, STs and other marginalised groups.
53. One rank, one pension for ex-servicemen from July 1
54. Interest subsidy for home loans up to Rs 1 lakh
55. Rs 2,000 cr for rural housing fund under National Housing Bank
56. Commonwealth Games allocation hiked to Rs 16,300 cr
57. Rs 2,113 cr for IITs and NITs
58. Pension of non-commissioned officers to be hiked
59. Rs 25 cr each for AMU campuses in Murshidabad and Mallapuram
60. Rs 1,000 cr for Aila rehabilitation programme to West Bengal
61. Funds for GSI to enhance exploration of minerals
62. IIFCL will refinance 60% of commercial bank loans in PPP
63. Housing allocation hiked under Rajiv Awaas Yojana
64. Trade in goods and services doubled in 2008
NEW DELHI: Finance minister Pranab Mukherjee's speech failed to sketch out the new UPA government's larger vision of reform and growth, and thus
lost out on a major opportunity to energise the economy's flagging animal spirits. That said, the Budget is not the complete damp squib on growth and reform that the markets' nosedive would have us believe.
In a global scenario where the major economies continue to contract, even if more slowly than before, there is no way the government could have taken the pedal off fiscal expansion, to keep India’s growth momentum going. Thus, the largest ever fiscal deficit, measuring 6.8% of GDP for 2009-10 and a tax burden on the economy that is lower, proportionate to GDP, than in the last fiscal, is a plus, rather than a negative.
In fact, 6.8% of GDP is the Centre’s deficit alone. Take into account the states’ deficit of nearly 4% of GDP and likely, albeit unstated, off-budget borrowings to finance fertiliser and food subsidies, the combined government borrowing requirement would be a little under 12% of GDP. That is a huge piece of fiscal stimulus.
To avert the risk of this huge borrowing requirement pushing up interest rates and choking off growth, the government should proactively announce an intention to raise a sizeable part of it outside the country. That should settle domestic jitters over a liquidity crunch.
An unheralded medium term fiscal policy statement put up on the Finmin web site targets a fiscal deficit of 5.5% of GDP next year and 4% of GDP in the year after. It is surprising that Mr Mukherjee failed to flag this off.
Then there is the infrastructure agenda. The government’s direct spending on roads and railways is slated to go up sharply. Financial engineering is on the cards - take-out finance and refinancing by IIFCL - to ensure that enough credit would be available for infrastructure projects. The government continues to swear by public-private partnership.
For all their flaws, PPP projects are enhancing India’s infrastructure right now. And there are sufficient mechanisms outside the Budget for one to hope that future PPP projects would be better designed and less vulnerable to post-contract abuse.
Many people tend to dismiss the entire inclusion, rural development and empowerment agenda as so much political fluff. On the contrary, this is the core of lasting reform.
To appreciate this, one must have clarity on what constitutes reform. Reform is ultimately about freeing up the creative energies of the people at large. Not just of people who are entrepreneurs and would-be entrepreneurs now. But also of the hundreds of millions of those who currently focus just on subsistence.
Financial sector, tax and administrative reforms are means to this end. True, India has a demographic dividend to reap even with existing levels of output per worker. But imagine the bounty if one billion plus Indians can afford to think beyond subsistence, think creatively. For that to happen, we need not only the kind of inclusive policies being pursued by the government but also complementary political mobilisation to empower people. That, of course, goes beyond the Budget.
The reiterated commitment to stick to the April 1, 2010 deadline for switching over to a Goods and Services Tax is a plus. The Budget asks the citizens to await further action in eight areas, pending reports by expert committee or finalisation of law or action plan: building a natural gas grid, offering relief to farmers who are indebted to moneylenders rather than to banks, operationalising food security, freeing up petroleum product prices, addressing the concerns of private investors, a direct tax code to streamline all direct taxes, a scheme to overhaul fertiliser subsidy and fiscal consolidation, a roadmap to which would be unveiled by the 13th Finance Commission headed by Vijay Kelkar, whose report is due in October. On some of these, we have already had many committees. The implicit dialatoriness disappoints. At the same time, the retention of this reform agenda is reassuring.
On the whole, the Budget marks continuity of slow reform in the right direction, even if it fails to release adrenaline in our market bulls.
STUDY WELL: The Budget also has a provision of Rs 350 crore to set up 6,000 model schools.
New Delhi: India on Monday pegged its expenditure outlay at Rs 44,528 crore (Rs 445.28 billion) for both school and higher education which is around 20 per cent more than the last fiscal.
According to the union budget 2009-10 proposals, while school education gets over Rs 29,099 crore (Rs 290.99 billion), the higher education bags Rs 15,429 crore (Rs 154.29 billion). The figures include both planned and unplanned outlay. Last fiscal, the total budget outlay for education was Rs 37,366 crore.
Finance Minister Pranab Mukherjee presenting the Budget in Parliament said the Human Resource Development ministry has been provided an allocation of Rs 36,400 crore (planned outlay). This includes an estimated receipt of Rs 12,784.87 crore by way of proceeds from education cess. The fund will be spent mainly for Sarva Shiksha Abhiyan and Midday Meal schemes.
While budget hails both the schemes and allocates more money for strengthening them, it also has made provision of Rs 350 crore to set up 6,000 model schools as benchmark of excellence.
An outlay of Rs 750 crore has been kept for disbuRs ing 100,000 scholaRs hips for students in class 11-12 under the national means-cum-merit scholaRs hip scheme.
Keeping its promise to boost higher education, the government allocated the sector over Rs 40 billion more than the last fiscal, including a package of over Rs 10 billion for the implementation of quota for other backward castes (OBCs).
The higher education budget for the current fiscal has been pegged at Rs 15,429 crore (Rs 154.29 billion), including a planned allocation of Rs 9,600 crore. During the last financial year, the total allocation was Rs 11,340 crore.
"The demographic advantage India has, in terms of large per centage of young population, needs to be converted into a dynamic economic advantage by providing them the right education and skills," the finance minister said.
However, Sushil Kumar, a former professor at IIM-Lucknow, is not impressed even as he hoped that higher education infrastructure will be improved.
"I believe the government has a mandate to increase education budget to six per cent of the GDP but looking at the present budget it is still two less than the target. The government needs to do more to improve educational situation in the country," said Kumar, now dean of academics of the Gautam Budhha UniveRs ity in Noida.
He was referring to the last UPA government's promise to allocate six per cent of the GDP to improve education in the country.
"But I believe the budget allocation for higher education institutes like IITs and IIMs will improve the infrastructural bottlenecks in the existing and upcoming ones," Kumar said.
The UniveRs ity Grant Commission (UGC) has been provided an allocation of Rs 4,374.95 crore, which includes expenditure for both central and deemed univeRs ities.
"The government shall take forward its intent of having one central univeRs ity in each uncovered state and for this purpose I am allocating Rs 827 crore," the minister announced in his budget speech.
Clarifying the expenditure for implementation of 27 per cent quota for the OBC students, the budget underlined that "the allocation for central univeRs ities includes a provision of Rs 1,033 crore for implementation of oveRs ight committee recommendations on implementations of the reservation for OBC communities."
The provision for the scheme Mission in Education through ICT has been substantially increased to Rs 900 crore. Similarly the provision for setting up and upgradating polytechnics under the skill development mission has been increased to Rs 495 crore.
Announcing a special package for the Panjab UniveRs ity, Mukherjee said: "The facilities at the Panjab UniveRs ity, Chandigarh, need to be improved. I therefore, propose to make an allocation of Rs 50 crore for this univeRs ity."
The budget has also allocated Rs 90 crore for Indira Gandhi National Open UniveRs ity (IGNOU) and state open univeRs ities to promote distance education. The budget further underlined that there is a provision of Rs 3,902 crore for technical education that includes provision towards assistance to IITs, IIMs and NITs.
INDIAN HEALTHCARE: An amount of Rs 21,113.33 crore sanctioned for improving healthcare in country.
New Delhi: The country’s health budget has gone up by nearly Rs 4,000 crore to Rs 21,113.33 crore with Finance Minister Pranab Mukherjee Monday giving special emphasis to the rural healthcare.
The National Rural Health Mission (NRHM) that aims to provide quality healthcare to villagers Monday saw its budget allocation increase by Rs.2,057 crore.
Describing the NRHM as an "essential instrument for achieving goal of health for all", Mukherjee in his budget speech proposed "an increase of Rs.2,057 crore over and above Rs.12,070 crore provided in the interim budget" he had presented before the general elections earlier this year.
The flagship programme of the United Progressive Alliance (UPA) government, the NRHM was launched in 2005. The aim was to improve availability and access to quality healthcare for people living in remote areas.
The main focus is on 18 states that have weak public health infrastructure - Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu and Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttarakhand and Uttar Pradesh.
Hoping to strengthen the tertiary sector, the government is setting up six All India Institute of Medical Sciences (AIIMS)-like institutions in the country and upgrading 13 existing medical colleges.
While the upgradation is likely to be completed in the current year, the six institutions are likely to be operationalised by 2010-11, says the plan outlay of the union budget. For this project, Rs.1,447.92 crore has been earmarked.
Aimed at correcting the regional imbalance in the availability of affordable and reliable healthcare services, the project envisages setting up AIIMS prototypes in Patna (Bihar), Raipur (Chhattisgarh), Bhopal (Madhya Pradesh), Bhubaneswar (Orissa), Jodhpur (Rajasthan) and Rishikesh (Uttarakhand).
The Budget has also allocated Rs.10 crore for the National Programme for Prevention and Control of Deafness (NPPCD). The pilot phase is being launched in 25 districts in the next two years and aims to prevent avoidable hearing loss and ensure early identification, diagnosis and treatment of ear problems responsible for hearing loss and deafness.
The budget also allotted Rs.100 crore for kickstarting medical, non-medical and nursing courses in institutions under the health ministry for accommodating 27 percent reservation for the Other Backward Classes (OBC).
In its bid to develop, promote and make the Indian systems of medicines more scientific, the department of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH) under the health ministry was allocated Rs.734 crore.
The finance minister in his 2009-10 budget also increased by 40 percent the allocation for the Rashtriya Swasthya Bima Yojana (RSBY), the health insurance plan that was launched last year.
"More than 46 lakh BPL (below poverty line) families in 18 states and UTs (union territories) have been issued biometric smart cards" for the scheme, the finance minister said in his speech.
He said this scheme "empowers poor families by giving them freedom of choice for using healthcare services from an extensive list of hospitals including private hospitals".
"Government proposes to bring all BPL families under this scheme. An amount of Rs.350 crore, marking 40 percent increase over the previous allocation, is being provided in 2009-10 budget estimates," Mukherjee said.