rediff.com Budget 2000: The FM's Speech


	HOME \| BUSINESS \| BUDGET 2000-2001 \| BUDGET SPEECH

February 29, 2000

NEWSLINKS
BUDGET 2000 LIVE!
BUDGET ON REDIFF
D&B BUDGET SPL
ECONOMIC SURVEY
RLY BUDGET
BUDGET: RUN-UP
BUDGET PROCESS
BUDGET HOTLINKS
Y2K BIZ FEATURES
INDIA & THE WTO
GOVT&ECONOMY
SPECIALS
INTERVIEWS
COMMENTARY
CREDIT POLICY
BUDGET 1999-2000
USEFUL INFO
ARCHIVES
SEARCH REDIFF

Finance Minister Yashwant Sinha's Budget Speech

BUDGET
2000

Part I

The Planning Commission and the Ministry of Agriculture have worked out modalities to integrate 28 ongoing separate Centrally Sponsored Schemes of agricultural development into one comprehensive programme. This will weed out duplication, enhance the productivity of the support programme and accord greater flexibility to State Governments to develop and pursue activities on the basis of regional priorities. This is a major step forward towards the goals of convergence and decentralisation that I had outlined in my budget last year.

There is urgent need to review and coordinate our long-term strategy at the National and the State levels on the pattern of land use in the country, development of agriculture in relation to the agro-climatic conditions in the different regions and preservation of our forest resources. We need to adopt an integrated approach to a number of related subjects such as preservation and development of the forest wealth, optimum utilisation of the wasteland, watershed development, safeguarding bio-diversity etc. In view of the complexity of the issues involved, a National Commission on Land Use Policy comprising of experts in the relevant fields will be set up to examine the various aspects and make appropriate recommendations to Government.

Our Government stands fully committed to ensure that the fruits of economic reforms are shared by all sections of society, especially those living in rural areas and more particularly the Scheduled Castes, Scheduled Tribes and Other Backward Classes. Five elements of social and economic infrastructure are critical to the quality of life specially in rural areas: health, education, drinking water, housing and roads.

Even after 52 years of Independence the provision of basic services in rural areas remains very unsatisfactory. Forty per cent of our villages are without proper roads; 1.8 lakh villages do not have a primary school within 1 km; 4.5 lakh villages have drinking water problems; some estimates indicate a shortage of 140 lakh rural dwelling units; rural health infrastructure suffers from large deficiencies. These large gaps in basic services in rural areas are not acceptable and Government is committed to removing them rapidly.

Universalisation of elementary education is one of our key objectives. A new Department of Elementary Education and Literacy has already been created under the Ministry of Human Resources Development to give a new thrust and focus to these efforts. Some new initiatives include a scheme for universalisation of elementary education called "Sarva Shiksha Abhiyan" which would enable all children to enroll by 2003 and expansion of the District Primary Education Programme to cover the remaining districts in Uttar Pradesh, West Bengal, Orissa and Gujarat. On the literacy front the National Literacy Mission would be revamped so that the literacy rate can be raised to 75% by the year 2005. The plan allocation for elementary education has been increased from Rs.2,931 crore to Rs.3,729 crore next year. A new Department of Drinking Water Supply in the Ministry of Rural Development has been set up to intensify the efforts and accelerate the pace of coverage. Our objective is to provide drinking water facilities in all rural habitations in the next five years. It is proposed to cover around 60,000 habitations and 30,000 schools in the next year. The outlay of the Department is being enhanced to Rs.2,100 crore from Rs.1,807 crore this year. The Reproductive and Child Health programme will receive Rs.1,051 crore as against an allocation of Rs.695 crore in 1999-2000. For rural housing schemes a provision of Rs.1,710 crore has been made.

To impart greater momentum to these efforts I am announcing the launching of a new scheme, the "Pradhan Mantri Gramodaya Yojana" with the objective of undertaking time bound programmes to fulfill these critical needs of the rural people. I am providing a sum of Rs.5,000 crore separately for this Scheme in the budget. Out of this a sum of Rs.2,500 crore will be earmarked for launching a nationwide programme of constructing rural roads and improving rural connectivity. Under the Scheme, Central assistance will be provided to States for implementing specific projects in these sectors. The concerned Ministries in the Central Government will lay down the guidelines and monitor the implementation of these programmes. The erstwhile Basic Minimum Services Scheme will be merged with the new Scheme. Thus the overall provision in the budget for schemes concerning the five basic needs of the rural population is more than Rs.13,000 crore.

Rural Housing "Housing for All" has been identified as a priority area in the Agenda for Governance. For the coming financial year, a goal of providing 25 lakh dwelling units in rural areas has been fixed. Schemes for meeting the needs of different sections of society have been prepared. (i)Under Indira Awas Yojana, it is proposed to provide more than 12 lakh houses for the people below poverty line. For this purpose, an amount of Rs.1,501 crore is being provided in the budget. (ii)For families with an annual income of below Rs.32,000 per annum, assistance will be provided for construction of 1 lakh houses under credit-cum-subsidy Scheme. An amount of Rs.92 crore is being provided in the budget for this scheme. (iii)The National Housing Bank will provide refinance to banks and housing finance companies for construction of 1.5 lakh houses under Golden Jubilee Rural Housing Finance Scheme. (iv)To further improve the availability of housing finance in rural areas, Government have decided to provide equity support of Rs.350 crore to HUDCO during the Ninth Plan period. Of this, Rs.200 crore have already been released and it is proposed to release a further amount of Rs.100 crore in the next year. With this enhanced equity support, HUDCO will be able to leverage these funds and raise further resources to facilitate and provide finance for the construction of about 9 lakh houses in the rural areas in the coming financial year. (v)The cooperative sector and voluntary agencies etc. will support the construction of another 1.5 lakh houses.

Social Security for the Poor More than one third of our population still lives below the poverty line. There is an imperative need to extend some social security cover to the poorest sections of our society. I have decided to introduce a new scheme of group insurance, "Janashree Bima Yojana", under which beneficiaries will have insurance cover of Rs.20,000 in case of natural death, Rs.50,000 in case of accidental death or total permanent disability and Rs.25,000 for partial permanent disability due to accident. Premia will be fixed on an actuarial basis. Below poverty line participants in this Scheme will pay only half the premium, with the remainder being contributed from earnings of LIC's existing Social Security Fund, suitably augmented by Government. On this basis, the monthly premium to be paid by the beneficiary is expected to be Rs.10 or less. This scheme will lay a firm foundation for insurance cover to the poorest in our country.

Empowerment of Women There is an urgent need for improving the access of women to national resources and for ensuring their rightful place in the mainstream of economic development. Towards this objective, the Government will set up a Task Force under an eminent person to review all existing legislation and Government schemes pertaining to the role of women in the national economy. This Task Force will help us chalk out specific programmes for observing 2001 as "Women's Empowerment Year".

Population, Health and Environment Government have recently announced a new National Population Policy a key objective of which is to bring down total fertility rates to replacement levels by 2010. To operationalise this objective, the plan allocation of the Department of Family Welfare has been increased from Rs.2,920 crore in B.E. 1999-2000 to Rs.3,520 crore next year.

Recognising the role of the Indian systems of medicine and homeopathy in our health care, the plan allocation for the concerned Department is being doubled. Emphasis will be placed on drug standardisation, quality control, modernising the colleges, drug testing laboratories and formulations. This will also help in boosting exports of herbal formulations.

We must preserve and nurture our forests and environment for future generations. Funds are being provided for regeneration of mangroves and creation of shelterbelts along the coastal line, bamboo regeneration and afforestation programme, encouragement of medicinal plants and eco-tourism. Preservation of the rural environment will raise the living standards of millions belonging to the weakest sections of our society.

Small Scale Industry The SSI sector plays a vital role in industrial production, employment generation and exports. In the context of growing domestic and international competition, our strategy is to support this sector through promotional policies of credit and technology. For improving credit flow to SSI units, I propose the following: The requirement of providing collateral security is a major bottleneck to the flow of bank credit to very small units. RBI has recently issued instructions to dispense with the collateral requirement for loans up to Rs.1 lakh. The limit is being further increased for the tiny sector from Rs.1 lakh to Rs.5 lakh. The existing composite loan scheme of SIDBI and banks helps small borrowers by providing working capital and term loans through a single window. To promote credit flow to small borrowers, the composite loan limit is being increased from Rs.5 lakh to Rs.10 lakh.

I am asking the public sector banks to accelerate their programme of SSI branches to ensure that every district and SSI clusters within districts are served by at least one specialised SSI bank branch. Furthermore, to improve the quality of banking services, SSI branches are being asked to obtain ISO certification. Last year, I had announced that a credit guarantee scheme for SSI will be launched. I am glad to inform the House that a new Central Scheme for this purpose has been formulated and a provision for Rs.100 crore has been made in the budget. The Scheme will be implemented through SIDBI and will cover loans upto Rs.10 lakhs from the banking sector. The guaranteed loans will be securitised and will be tradeable in the secondary debt market.

SIDBI operates the National Equity Fund Scheme under which equity support is provided for projects up to Rs.15 lakh. To further help SSI entrepreneurs, this limit will be raised from Rs.15 lakh to 25 lakh.

Continued

Tell us what you think of this Budget 2000 coverage