He has allocated Rs5000 crore towards a Backward Regions Grant Fund. This allocation will continue for the next four years. The Twelfth Finance Commission has also provided Rs7975 crore for the development of backward regions in Bihar over the next five years.

In addition, a new scheme, called the Bharat Nirman Programme, has been launched to give a new deal to rural India. Under this, stress will be laid on the development of six areas: irrigation, roads, water supply, rural electrification, housing and rural connectivity.

There is a proposal to bring in an additional one crore hectares of rural land under irrigation. Also, 60 lakh houses will be constructed for the poor. And all villages in the plains with a population of more than 1,000 and those in hilly areas with a population of above 500 will be connected with roads. Finally, there are provisions to provide drinking water to 74,000 habitations, electricity for 1,25,000 villages (at a cost of Rs11 billion) and telephone connectivity to 66,822 villages by BSNL

At only 8.75 per cent, the tele-density in the country was very low, said the finance minister. He informed Parliament that Rs17 billion was granted to the 'universal service obligation fund' (USO) last year. This year, a total of Rs12 billion is being allocated for the purpose.

"The removal of mobile phones from 1 x 6 requirements for filing of Income Tax Returns, will also remove entry barriers for a section of potential mobile customers which is positive for improved tele density and penetration," says Vikram Mehmi, CEO, Idea Cellular. "Similarly, provision of Rs1200 crore for USO fund will increase demand for telephony in the rural areas. With this, the target of 250 million phones can be achieved much earlier than expected."

Good news for the city-bred has come by way of a plan outlay of Rs5500 crore for the development of seven mega cities. Called the National Urban Renewal Mission, it will draw on central resources for specific projects like the Mumbai Metro, the Mumbai trans-harbour sea link, the Mumbai Western expressway project and the Bangalore international airport.

Says Shravan Shroff, managing director, Shringar Cinemas Limited, a big time film distribution company and owner of multiplexes in Mumbai and other metros, "Allocation of money for Mumbai is good for infrastructure creation of the city. It shall turn out to be positive for all companies in Mumbai. All in all, it's a good budget for the common man and the equity markets."

The finance minister touched on the modalities of funding the various infrastructure projects. He revealed that the country's burgeoning foreign exchange reserves could be tapped to fund some of these projects. In addition, Special Purpose Vehicles (SPVs) could be floated to fund large projects in some sectors like ports, roads and airports. The total limit of these SPVs, he revealed, would be to the order of Rs100 billion. The proposal to dig into the country's foreign exchange reserves for funding a part of the proposed infrastructure development will be looked at as a positive step. The reserves are now at an all-time high of $ 132.96 billion.

"The Special Purpose Vehicle (SPV) for development of infrastructure and the cess on petroleum products exclusively for the development of highways is a positive step towards progress of the country," says Yashovardhan Birla, Chairman Yash Brila Group. "Overall, it's a balanced budget," he added. "Keeping in mind political compulsions, the finance minister has balanced the budget very well, with comprehensive rural development programs."

Other proposals, with reference to particular sectors, include:

RAILWAY

• The Udhampur-Baramulla rail section will be completed on a priority basis.

HIGHWAYS

• Rs 450 crore will be provided for the development of a highway network in the North East.
  
• Rs. 14 billion will be spent towards 4-laning 4000 km of highways
  
• The outlay for FY06 under the National Highway Development Programme (NHDP) is now Rs. 93.20 billion. (This is exclusive of the Golden Quadrilateral Project and the North-South And East-West highway corridors projects). The cess on petrol and diesel has been raised by 50 paisa to Rs 2 per litre as part of the funding of the NHDP.

POWER

• The Baglihar Hydel Project in Jammu & Kashmir, which was given Rs 300 crore last year will be given "adequate funds next year', informed he Finance Minister.

HOUSING

• This year, 15 lakh new houses to be built under the Indira Awaas Yogana. The outlay for this scheme has been increased from Rs. 2500 crore to Rs. 2700 crore.
  
• Residential construction projects are now proposed to be brought under the ambit of service tax.

Concludes Anil Jhala , CFO, Sun Life Insurance Company Ltd., "The budget reaffirms the resolve of the government to accelerate the process of reforms with an adequate emphasis on infrastructure spending."