With a major step up in allocations towards education, health and agriculture, Finance Minister P. Chidambaram concluded the Part I of his budget speech Friday, hoping for an 8.8 percent growth in this fiscal ending March 2008.
With an eye on impending elections in several states and to the Lok Sabha, he proposed additional allocation in the fiscal year 2008-09 for several social sector schemes, including those for education, health, job guarantee, urban renewal and rural development.
In education, he said, the outlay was being stepped up by 20 percent, even as new Indian Institutes of Technology (IITs) were proposed in Andhra Pradesh, Bihar and Rajasthan.
He also announced an allocation of Rs.312 billion for the Bharat Nirman programme, Rs.344 billion for education and Rs.131 billion for the Sarva Siksha Abhiyan and said the National Rural Employment Guarantee Scheme (NREGS) would be extended to all 596 rural districts of the country.
On the farm front, he said that the growth of just 2.6 percent expected this year in agriculture was disappointing and was responsible for the retardation of the overall expansion of the Indian economy, which was otherwise on a high growth trajectory.
'The economy is expected to grow by 8.7 percent,' he said, referring to the projections of the Economic Survey tabled by him Thursday. 'But I personally think, the growth would be slightly higher at 8.8 percent.'
The finance minister started his speech with concerns over inflation, on account of both domestic and global factors, and said the intention of his government was to make growth more inclusive with a focus on social sectors and agriculture.
He said some areas within the broader farm sector, such as irrigation, would get a heavy dose of investments, even as 500 new soil-testing laboratories would be set up across the country over the next five years.
He said agriculture credit would have doubled by March this year, even as he announced complete waiver of loans for small and marginal farmers holding up to two hectares under a rural debt waiver scheme.
'In respect of other farmers there will a one-time settlement scheme,' he said, adding that some 30 million farmers were expected to benefit from the announcement.
Chidambaram said that the weather-based crop insurance scheme would continue, along with an allocation of Rs.200 billion for irrigation, Rs.400 million for a special tea fund.
He also introduced a new health insurance scheme for the poor, additional allocation of Rs.14.55 billion for the development of north-eastern states and more funds for the Scheduled Castes, the Scheduled Tribes and minorities.
Expressing concern earlier in his speech over rising prices, Chidambaram said, 'management of the supply side of food articles will be the most crucial task' in the next fiscal.
'Keeping inflation under check is one of the cornerstones of our policy,' he said, adding that the large inflow of money from overseas was posing problems of adding to money supply.
'The solution lies in increasing the absorptive capacity of the economy in the medium term. In the short term it is our responsibility to manage the flows more actively,' he said.
The minister said the country's finances were also in good shape and noted that the revenue deficit for the current fiscal would be 1.2 percent, against budget estimates of 1.5 percent, while fiscal deficit was 3.1 percent, against 3.3 percent.
Source: http://www.aol.in/news/story/2008022903419012000002/index.html
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