Tuesday, July 7, 2009

India Union Budget 2009-10

# To lead the economy back to the high GDP growth rate of 9 per cent per annum at the earliest.

## To deepen and broaden the agenda for inclusive development; and to ensure that no individual, community or region is denied the opportunity to participate in and benefit from the development process.

### To re-energize government and improve delivery mechanisms by providing high quality public services, security and the rule of law to all citizens with transparency and accountability.

Infrastructure Development

IIFCL which was set up as a special purpose vehicle for providing long term financial assistance to infrastructure projects for stimulating public investment in infrastructure will be given greater flexibility to aggressively fulfill its mandate.IIFCL would, in consultation with banks, evolve a 'takeout financing' scheme which could facilitate incremental lending to the infrastructure sector.To ensure that infrastructure projects do not face financing difficulties arising from the current downturn IIFCL will refinance 60 per cent of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months.

Policy, regulatory and institutional bottlenecks for speedy implementation of infrastructure projects would be removed and sufficient funds would be made available for this sector.

Agricultural Development

The target for agriculture credit flow for the year 2009-10 is set at Rs.3,25,000 crore as against Rs.2,87,000 crore fixed for 2008-09.

Interest subvention scheme for short term crop loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7 per cent per annum to continue. Additional subvention of 1 per cent will be paid as an incentive to those farmers who repay their short term crop loans on schedule. Thus, the interest rate for these farmers will come down to 6 per cent per annum.

Under ADWDRS 2008, farmers having more than 2 ha. of land were given time upto 30th June, 2009 to pay 75% of their overdues. Due to the late arrival of monsoon this period is extended by six months upto 31st December, 2009.

A Task Force will be set up to examine in detail the issue of exclusion of a large number of farmers who have availed loans from private money lenders in some regions of Maharashtra from the purview of ADWDRS 2008.

An additional allocation of Rs.1,000 crore over Interim BE made for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09 (BE).

The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over Budget Estimates of 2008-09.

To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime. It will lead to availability of innovative fertilizer products in the market at reasonable prices. This unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers.

MSME Sector

Interest subvention of 2 per cent on pre-shipment credit for seven sectors viz textiles including handlooms, handicrafts, carpets, leather, gems and jewelery, marine products and small and medium exporters beyond the current deadline of September 30, 2009 to March 31, 2010.

To facilitate the flow of credit at reasonable rates to MSME sector which is affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand, a special fund out of Rs. 4000 crore out of RIDF to be allocated to SIDBI. This fund will incentivise Banks and SFCs to lend to MSEs by refinancing 50 per cent of incremental lending to MSEs during the current financial year.

Financial Inclusion

Scheduled Commercial Banks are now allowed to set up off-site ATMs without prior approval of, subject to reporting.

Despite the expansion of banking network in the country, there are still some areas that remain under-bank or unbank. A sub-committee of SLBC will identify such areas and formulate an action plan for providing banking facilities to all these areas in the next 3 years. Rs.100 crore will be set aside during the current year as one-time grant-in-aid to ensure provision of at least one centre/Point of Sales (POS) for banking services in each of the unbank blocks in the country.

National Rural Employment Guarantee Scheme (NREGS)
A real wage of Rs.100 a day to be made as an entitlement under the NREGA. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated. In the first stage, a total of 115 pilot districts have been selected for such convergence.
An allocation of Rs.39,100 crore is proposed for the year 2009-10 for NREGA which marks an increase of 144% over 2008-09 Budget Estimates.

Bharat Nirman

Allocations for Bharat Nirman increased by 45 % in 2009-10 over the BE of 2008-09.

The allocation for PMGSY increased by 59% over BE 2008-09 to Rs.12,000 crore.

Rs.7,000 crore allocated to Rajiv Gandhi Grameen Viduytikaran Yojana (RGGVY) which represents a 27 per cent increase over 2008-09 (BE).

The allocation for the Indira Awaas Yojana ( IAY) increased by 63 per cent to Rs.8,800 crore in Budget Estimates 2009-10.

To broaden the pace of rural housing a sum of Rs.2,000 crore allocated from the shortfall in the priority sector lending of commercial banks for creation of Rural Housing Fund in the National Housing Bank (NHB). This will boost the resource base of NHB for their refinance operations in rural housing sector.

Pradhan Mantri Adarsh Gram Yojana (PMAGY)
A new scheme called Pradhan Mantri Adarsh Gram Yojana (PMAGY) will be launched this year on a pilot basis, for the integrated development of 1000 villages where the SC population is above 50 per cent. An allocation of Rs.100 crore is made for this scheme. Each village would be able to avail gap funding of Rs.10 lakh over and above the allocations under Rural Development and Poverty Alleviation Schemes. On successful implementation of the pilot phase, the Yojana would be extended in coming years.

Empowerment of Weaker Sections

SGSY : The SGSY is being restructured as the National Rural Livelihood Mission (NRLM) to make it universal in application, focused in approach and time bound for poverty eradication by 2014-15. Stress will be laid on the formation of women SHGs. Apart from providing capital subsidy at an enhanced rate, interest subsidy to poor households for loans upto Rs. one lakh from banks will be provided.

SHGs : To enroll at least 50% of all rural women in India as members of SHGs over the next five years and link these SHGs to banks.

RMK : In recognition of its role as an instrument of socio-economic change and development, the corpus of RMK, which at present is Rs.100 crore, would be raised to Rs.500 crore, over the next few years.

Education Loan : A scheme to provide full interest subsidy during the period of moratorium to cover loans taken by students from economically weaker sections to access higher education from scheduled banks to pursue any of the approved courses of study, in technical and professional streams, from recognised institutions in India will be introduced such students. Over 5 lakh students expected to avail of this benefit.

Employment Exchanges : A new project for modernisation of the Employment Exchanges in public private partnership so that a job seeker can register on-line from anywhere and approach any employment exchange. Under the project, a national web portal with common software will be developed. This will contain all the data regarding availability of skilled persons on the one hand and requirements of skilled persons by the industry on the other. It will help youth get placed and enable industry to procure required skills on real time basis.

Rashtriya Swasthya Bima Yojana (RSBY) : The initial response to RSBY operationalised last year has been very good. More than 46 lakh BPL families in 18 States and UTs have been issued biometric smart cards. This scheme empowers poor families by giving them freedom of choice for using health care 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% increase over the previous allocation, will be provided in 2009-10


The Sizzler! said...

that's a very detailed explanation of the budget. i've linked my satirical blog to your for people wishing to get a better understanding of the same.

good work.


Union Budget 2009-10 said...

Budget Estimate 2009-10

* Budget Estimates provide for a total expenditure of Rs 10,20,838 crore (US$ 211.1 billion) consisting of Rs 695,689 crore (US$ 143.81 billion) under Non-plan and Rs 325,149 crore (US$ 67.31 billion) under Plan registering an increase of 37 per cent in Non-plan expenditure and 34 per cent in Plan expenditure over B.E. 2008-09.
* Total expenditure in B.E. 2009-10 increased by 36 per cent over B.E. 2008-09.