The interim union budget presented by minister of external affairs and acting finance minister Pranab Mukerjee has projected fiscal 2009-10 spending at Rs9,53,231 crore, including Rs2,85,149 crore in plan allocation and Rs6,68,082 crore in non-plan expenditure.
He also presented revised estimates of plan and non-plan expenditure in revenue year 2008-09 of Rs9,00,953, showing an increase of Rs1,50,069 crore from the allocations of Rs7,50,884 crore in budget year 2008-09.
Plan expenditure during the current fiscal has gone up from Rs2,43,386 crore in budget year 2008-09 to Rs2,82,957 crore in revenue year 2008-09.
Plan expenditure increased by Rs1,10,498 crore in revenue year 2008-09 as per revised estimates for 2008-09 while non-tax revenues increased from Rs95,785 crore to Rs96,203 crore.
Revised estimates of gross tax collection has been projected at Rs6,27,949 crore as against budget estimates on 2008-09 of Rs6,87,715 crore, primarily due to pro-active fiscal measures initiated to counter the impact of global slowdown on the Indian economy, the minister said.
Revised Revenue deficit has been pegged at Rs2,41,273 crore (4.4 per cent of GDP) as against budgeted figure of Rs55,184 crore (1 per cent of GDP).
Fiscal deficit is expected to go up from Rs1,33,287 crore (2.5 per cent of GDP) in budget year 2008-09 to Rs3,26,515 crore (6 per cent of GDP).
Budget Estimates 2009-10
Total expenditure for fiscal 2009-10 is estimated at Rs9,53,231 crore, comprising plan expenditure of Rs2,85,149 crore and non-plan expenditure of Rs6,68,082 crore.
Budgetary support in budget year 2009-10 has been raised mainly for labour-intensive and social sectors like the department of rural development, department of road transport and highways, railways, ministry of power, department of industrial policy and promotion and department of information technology.
Emphasis has also been made on meeting the requirements of rural and infrastructure development along with higher allocation for ministry of youth affairs and sports and ministry of culture to ensure adequate resources for hosting of the Commonwealth Games.
Allocations to flagship programme which directly impact the common people has been increased substantially.
Rs30,100 crore has been allocated for the National Rural Employment Guarantee Scheme for the year 2009-10. In 2008-09, the scheme is expected to have provided 1387.6 million mandays of employment, covering 35.1 million households.
About 98 per cent habitations covered by primary schools under Sarva Shiksha Abhiyan. Allocation for this programme increased by 571 per cent between 2003-04 and 2008-09. Allocation of Rs13,100 crore proposed for 2009-10.
Rs8,000 crore has been allocated for mid-day meals scheme for the year 2009-10.
Allocation of Rs6,705 crore has been proposed for the Integrated Child Development Scheme (ICDS) for the year 2009-10. The scheme will adopt new WHO child growth standards for monitoring growth of children under ICDS.
Three hundred and eighty-six projects involving expenditure of Rs39,000 crore has been sanctioned till 31 December 2008 under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Allocation of Rs11,842 crore has been proposed for the year 2009-10.
Rs7,400 crore has been allocated for Rajiv Gandhi Rural Drinking Water Mission, Rs1,200 crore for Rural Sanitation Programme, Rs12,070 crore for National Rural Health Mission and Rs40,900 crore has been allocated for Bharat Nirman for the year 2009-10.
A special provision of Rs100 crore in the annual plan 2009-10 has been made for a Unique Identification Authority of India.
A Rural Infrasructure Development Fund (RIDF-XV) has been proposed with a corpus of Rs14,000 crore. A separate window for rural roads will also continue with a corpus of Rs4,000 crore.
An interest subvention of 2 per cent on pre- and post-shipment credit for certain employment oriented sectors, i.e., textiles (including handlooms and handicrafts), carpets, leather, gem & jewellery, marine products and SMEs has been extended beyond 31 March 2009 till 30 September 2009, involving an additional financial outgo of Rs500 crore.
The government also plans to recapitalise the public sector banks over the next two years to enable them to maintain Capital to Risk Weighted Assets Ratio (CRAR) of 12 per cent.
The allocation for defence in fiscal 2009-10 has been increased to Rs1,41,703 crore, includes Rs.54,824 in capital expenditure.
Major subsidies including food, fertilizer and petroleum has been estimated at Rs95,579 crore.
For fiscal 2009-10, with Centre's net tax revenue estimated at Rs5,00,096 crore and revenue expenditure at Rs8,48,085 crore, revenue deficit is estimated at 4 per cent of GDP and fiscal deficit at 5.5 per cent of GDP.
Main Items of Expenditure 2009-10:
National Rural Employment Guarantee Scheme
- Rs 30,100 crore for providing 100 days of wage employment to each rural household opting for it. All the districts covering rural areas have been brought under NREGA with effect from 1 April, 2008.
Swaranjayanti Gram Swarozgar Yojana
- Rs2,350 crore for establishing micro-enterprises in rural areas. Activity clusters and group approach are the two key components of the programme. At least 50 per cent of the Swarozgaries will be SCs/STs, 40 per cent women and 3 per cent disabled.
- Rs8,800 crore for providing assistance to rural BPL households for construction of houses (and upgradation of Kuchcha houses). As per Indira Awaas Yojana guidelines, the houses are allotted in the name of the female member of the household or in the name of husband and wife. Sixty per cent of the total allocation is to be utilised for construction of houses for BPL families of SCs/STs.
Pradhan Mantri Gram Sadak Yojana
- Rs100,00 for providing connectivity to eligible unconnected rural habitations through good all-weather roads.
Accelerated Rural Water Supply Programme
- Rs7,300 crore for supplementing the states in their effort to provide safe drinking water to all rural habitations.
- Rs1,200 crore for Total Sanitation Programme.
Integrated Watershed Management Programme
- Rs2,021 for centrally sponsored scheme of Integrated Watershed Management Programme.
National Land Records Modernisation Programme
- Rs270 crore for land records modernisation.
Agriculture and Co-operation
- Rs11,00 for National Horticulture Mission.
- Rs1,100 crore for National Food Security Mission.
- Rs950 crore for Macro Management of Agriculture.
- Rs400 crore for Micro Irrigation.
- Rs 644 crore for National Agriculture Insurance Scheme (NAIS)
- Rs320 crore for integrated oilseeds, oil palm, pulses & maize development .
Animal Husbandry, Dairying and Fisheries
- Rs271 crore for veterinary services and animal health.
- Rs100 crore for cattle development.
- Rs75 crore for a special package for farming population in 31 suicide prone districts in the country.
Agricultural Research and Education
- Rs300 crore for research issues in crop sciences.
- Rs345 crore for agricultural education to improve the quality of human resource, upgrade infrastructure and educational reforms.
- Rs282 crore for agricultural extension programmes to disseminate frontline technologies.
- Rs252 crore for World Bank-aided National Agricultural Innovation Project.
Environment and Forests
- Rs617 crore for ecology and environment and national river conservation.
- Rs883 crore for forestry and wildlife and national afforestation and eco-development.
Micro, Snall Aand Medium Enterprises
- Rs144 crore for credit support programme to provide guarantee cover to banks for extending loans to small/tiny units without collateral.
- Rs823 crore for Prime Minister's Employment Generation Programme to provide subsidy to beneficiaries' meeting cost of training and to meet residual/ committed liabilities under Prime Minister's Rozgar Yojana/Rural Employment Generation Programme.
- Rs78 crore for consumer awareness.
- Rs37 crore for consumer protection.
Foog And Public Distribution
- Rs45 crore for computerisation of PDS operations in all states/union territories.
School Education And Literacy
- Rs13,100 crore for Sarva Shiksha Abhiyan.
- Rs8,000 for National Programme of Mid Day Meals in Schools.
- Rs1,354 crore for Rashtriya Madhyamik Shiksha Abhiyan.
- Rs750 crore for National Means-cum-Merit Scholarship Scheme.
- Rs3,440 crore for University Grants Commission - includes provision for implementation of the recommendations of Oversight Committee.
- Rs3,185 crore for tchnical education, including a provision for implementation of the recommendations of Oversight Committee.
- Rs552 crore for National Mission on Information and Communication Technology.
Women & Child Development
- Rs6,705 crore for Integrated Child Development Services.
- Rs60 core for Integrated Child Protection Scheme (ICPS).
- Rs100 crore for Rajiv Gandhi National Creche Scheme.
- Rs2,380 crore for research & development and promotion of information technology.
- Rs800 crore for establishing National Knowledge Network.
- Rs700 crore for e-Governance programme.
- Rs449 crore for National Informatics Centre to improve infrastructure.
- Rs105 crore for Centre for Development of Advanced Computing (C-DAC) for undertaking R&D.
- Rs26 crore for OFC based Network for Defence Services.
- Rs300 crore for C-DOT.
- Rs11,930 for National Rural Health Mission.
- Rs3,650 for health sector.
- Rs56 crore for development of ayurveda system
- Rs41 crore for development of homeopathy system.
- Rs37 crore for development of Unani system
- Rs50 crore for National Board for Medicinal Plants.
- Rs140 crore for National Rural health Mission.
- Rs30 crore for National Mission on Medicinal Plants.
- Rs215 crore for Inter-State and Economically Important Roads in different States and UTs.
- Rs600 crore for development of National Highways under Border Road Organisation.
- Rs7,977 crore for National Highway Development Programme in Golden Quadrilateral and North-South, East-West corridors, etc.
- Rs1,200 crore for Special Accelerated Road Development Project in North Eastern Region.
- Rs1,140 crore for Technology Upgradation Fund Scheme.
- Rs425 crore for Integrated Textile Park.
- Rs340 crore for handloom schemes.
- Rs220 crore for handicrafts schemes.
Social Justice And Employment
- Rs480 crore towards Special Central Assistance for Scheduled Castes Special Component Plan to benefit about 6 lakh beneficiaries.
- Rs750 crore for Post Matric Scholarships for SC students.
- Rs273 crore for Post Matric Scholarships for Scheduled Tribes students.
Development Of North Eastern Region
- Rs60 crore for North Eastern Development Finance Corporation.
Science And Technology
- Rs415 crore for Multi-Disciplinary Research in frontier areas.
- Rs145 crore for National Mission on Nano-Science and Nano-Technology.
- Rs100 crore for drugs & pharmaceuticals research.
- Rs85 crore for scholarships for science in higher education.
- Rs340 crore for research & development.
- Rs200 crore for autonomous R & D institutions.
- Rs455 crore for PSLV & GSLV.
- Rs382 crore for INSAT system.
- Rs270 crore for Navigational Satellite System.
- Rs217 crore for Geo-synchronous Satellite Launch Vehicle (GSLV) Mark-III Development.
- Rs90 crore for Indian Lunar Mission Chandrayaan- 1&2.
- Rs50 for manned mission initiatives/human space flight programme.
- Rs94 crore for establishment of 3rd permanent station in Antartica and launching of southern ocean expeditions besides annual expeditions to Antartica.
- Rs47 crore for strengthening the R&D activities for harnessing the resources from the sea.
- Rs25 crore for setting up a dedicated regional centre to address scientific issues relating to climate change.
- Rs800 crore for development of infrastructure, preparation of teams for holding Commonwealth Games, 2010.
- Rs140 crore for archaeology.
- Rs30 crore for Indira Gandhi National Centre for Arts.
- Rs19 crore for setting up of science cities.
Chemicals And Petrochemicals
- Rs50 crore for establishment of a petrochemical gas cracker project at Lepetkata, Dibrugarh (Assam).
- Rs50 crore for establishment of 6 new national institutes of pharmaceuticals education and research.
- Rs45 crore for Rashtriya Gram Swaraj Yojana.
- Rs10 crore for Panchayat Empowerment and Accountability.
- Rs24 for e-Panchayats Plan.
- Rs180 crore for setting up of a state of art automotive testing, validation and R&D infrastructure facilities in India.
- 119.34 lakh tonnes of Nitrogenous fertiliser production targeted.
- 38.42 lakh tonnes of Phosphatic fertiliser production targeted.
Coal And Lignite
- 534.33 million tonnes of domestic availability of coal has been assessed.
- 23.60 million tonnes of lignite production targeted.
- 14.40 million tonnes of saleable steel production by Steel Authority of India Ltd. and Rashtriya Ispat Nigam Ltd. targeted.
- 22.50 million tonnes of Iron Ore production by National Mineral Development Corporation Limited targeted.
- 20,000 Rolling stock wagons; 4,620 coaches;500 locos to be added.
- 3,500 kilometers of track renewal; 1,000 route kilometres of electrification; 1,500 route kilometres of gauge conversion.
- 400 kilometers new lines to be added; 1000 kilometers doubling of lines targeted.
- 5,000 Post Offices targeted for computerisation/ networking.
- 100 branch post offices to be opened.
- 50 sub post offices to be opened.
- 500 franchise outlets to be opened.
- 100 financial marts to be set up.
New And Renewable Energy
- 2678 MW Grid-Interactive Power Capacity addition targeted.
- 1,500 remote villages/hamlets targeted for electricity/lighting facility through SPV/other RE systems and devices, including DRPS.
- 25,000 solar cookers.
The budget estimates are based on Gross Domestic Product growth of 7.5 per cent, 9.5 per cent, 9.7 per cent and 9 per cent in the first four years from fiscal year 2004-05 to 2007-08.
The growth drivers for the period were agriculture, services, manufacturing along with trade and construction.
Fiscal deficit was down from 4.5 per cent in 2003-04 to 2.7 per cent in 2007-08 and Revenue deficit from 3.6 per cent to 1.1 per cent in 2007-08.
The domestic investment rate as a proportion of GDP increased from 27.6 per cent in 2003-04 to 39 per cent in 2007-08. Gross Domestic savings rate shot up from 29.8 per cent to 37.7 per cent during this period.
The gross capital formation in agriculture as a proportion of agriculture GDP increased from 11.1 per cent in 2003-04 to 14.2 per cent in 2007-08
The tax to GDP ratio increased from 9.2 per cent in 2003-04 to 12.5 per cent in 2007-08.
Annual growth rate of agriculture rose to 3.7 per cent during 2003-04 to 2007-08.
The foodgrain production recorded an increase of 10 million tonnes each year during this period and touched an all time high of 230 million tonnes in 2007-08.
While manufacturing sector recorded growth of 9.5 per cent per annum in the period 2004-05 to 2007-08, communication and construction sectors grew at the rate of 26 per cent and 13.5 per cent per annum respectively.
Exports grew at an annual average growth rate of 26.4 per cent in US dollar terms in the period 2004-05 to 2007-08. Foreign trade increased from 23.7 per cent of GDP in 2003-04 to 35.5 per cent in 2007-08.
Outlook For 2008-09
Despite the global financial crisis which began in 2007 impacting most emerging market economies, 7.1 per cent rate of GDP growth in the current year makes India the second fastest growing economy in the world.
Fallout of global slowdown on Indian economy were countered with fiscal stimulus packages announced on 7 December 2008 and 2 January 2009 providing tax relief to boost demand and increasing expenditure on public projects.
Government accorded approval to 37 infrastructure projects worth Rs70,000 crore from August 2008 to January 2009 alone.
Under PPP mode, 54 central sector infrastructure projects with a project cost of Rs67,700 crore given in-principal or final approval and 23 projects amounting to Rs27,900 crore approved for viability gap funding in 2008-09.
India Infrastructure Finance Company Ltd (IIFCL) to refinance up to 60 per cent of commercial bank loans for PPP projects involving total investment of Rs1,00,000 crore in infrastructure over the next eighteen months.
In addition to RBI taking number of monetary easing and liquidity enhancing measures such as reduction in cash reserve ratio, statutory liquidity ratio and key policy rates, the government has taken specific measures which include extension of export credit for labour intensive exports, improving pre and post shipment credit availability, additional allocations for refund of Terminal Excise Duty/CST and export incentive schemes besides removal of export duty and export ban on certain items.
A Committee of Secretaries set up to address procedural problems faced by exporters.
Record $32.4 billion FDI received in 2007-08 and notwithstanding financial
uncertainty and slowdown, FDI inflows during April-November, 2008 were $23.3 billion, recording a growth of 45 per cent over the same period in 2007.
FRBM targets for the current year and for fiscal 2009-10 relaxed to provide
much needed demand boost. However, medium term objective is to revert to fiscal consolidation at the earliest.
Initiatives And Achievements
Plan allocation for agriculture increased by 300 per cent from 2003-04 to 2008-09. Rashtriya Krishi Vikas Yojna launched in 2007-08 with an outlay of Rs25,000 crore to increase growth rate of agriculture and allied sector to 4 per cent per annum during Eleventh Plan period.
Agriculture credit disbursement increased three times from Rs87,000 crore in 2003-04 to about Rs.2,50,000 crore in 2007-08.
To strengthen short-term cooperative credit structure, revival package in 25 states involving financial assistance of about Rs.13,500 crore is being implemented.
Interest subvention to be continued in 2009-10 to ensure that farmers get short term crop loans up to Rs3 lakh at 7 per cent per annum.
The Agricultural Debt Waiver and Debt Relief Scheme, 2008 was implemented by 30 June 2008 as scheduled. Debt waiver/debt relief amounting to Rs65,300 crore covers 36 millionfarmers.
Despite higher procurement cost and higher international prices during the last 5 years, the central issue prices under Targeted Public Distribution System (TPDS) maintained at July 2000 level in case of Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) categories and at July, 2002 levels for Above Poverty Line (APL) category.
Minimum Support Price (MSP) for common variety of paddy increased from Rs550 per quintal in 2003-04 to Rs900 per quintal for the crop year 2008-09. In case of wheat, increase was from Rs630 per quintal in 2003-04 to Rs1,080 per quintal for the year 2009.
The corpus of Rural Infrastructure Development Fund (RIDF) increased from Rs5,500 crore in 2003-04 to Rs14,000 crore for the year 2008-09. A separate window for rural roads created with a corpus of Rs.4,000 crore for each of the last three years.
As against 60 lakh houses to be constructed under Indira Awaas Yojana by
2008-09, 60 lakh twelve thousand houses constructed between 2005-06 to
Panchayat Empowerment and Accountability Scheme (PEAIS) proposed to be expanded.
'Project Arrow' to provide new technology enabled services through post offices to common man and support effective implementation of social sector schemes like NREGS, while promoting financial inclusion.
Major initiatives, including a new centrally sponsored scheme launched to
universalise education at secondary stage in the year 2008-09.
Outlay on higher education increased 9 fold in the Eleventh Five Year Plan. Ordinance promulgated for establishing 15 central universities. In addition to 6 new Indian Institutes of Technology (IITs) in Bihar, Andhra Pradesh, Rajasthan, Orissa, Punjab and Gujrat which started functioning in 2008-09, two more IITs in Madhya Pradesh and Himachal Pradesh are expected to commence their academic session in 2009-10. 5 Indian Institute of Science Education and Research (IISER) announced earlier have become functional. Two new schools of planning and architecture at Vijayawada and Bhopal have started functioning. Teaching is expected to commence from academic year 2009-10 in four out of six new Indian Institute of Management proposed for the Eleventh Plan in Haryana, Rajasthan, Jharkhand and Tamil Nadu.
Due to revision in Educational Loan Scheme by the government number of
beneficiaries increased from 3.19 lakh to 14.09 lakh and amount of loan outstanding increased from Rs4,500 crore as of 31 March 2004 to Rs24,260 crore as of 30 September 2008.
Five hundred ITIs upgraded into centers of excellence. National Skill Development Corporation created in July, 2008 with initial corpus of Rs 1,000 crore.
Authorised capital of National Safai Karamchari Finance and Development
Corporation (NSKFDC) is being raised from Rs200 crore to Rs300 crore.
Scope of the pre-metric scholarship for children of those engaged in unclean occupations expanded and rates of scholarship doubled in 2008-09. Annual ad-hoc grant increased by about 50 per cent as compared to earlier rates.
Rashtriya Mahila Kosh to be strengthened by enhancing its authorised capital.
'Priyadarsini Project', a rural women's employment and livelihood programme, will be implemented as pilot in the district of Madhubani and Sitamarhi in Bihar and Shravasti, Bahraich, Rai Bareli and Sultanpur in Uttar Pradesh.
One hundred and forty-six lakh persons benefited under Indira Gandhi National Old Age Pension Scheme in the current financial year.
Two new schemes – 'Indira Gandhi National Widow Pension Scheme' to provide pension of Rs200 to widows between age groups of 40-64 years and 'Indira Gandhi National Disability Pension Scheme' to provide pension for severely disabled persons.
Widows in the age group of 18-40 years to be given priority in admission to ITIs, Women ITIs and National/Regional ITIs for women. Government to bear cost of their training and provide stipend of Rs.500 per month.
Twenty-two states and union territories initiated process to implement Rashtriya Swasthya Bima Yojana for BPL familities in the unorganised sector and 60 lakh thirty two thousand persons covered for death and disability under 'Aam Admni' Bima Yojana (AABY).
Public Sector Enterprises
Turnover of central public sector enterprises increased from Rs5,87,000 crore in 2003-04 to Rs10,81,000 crore in 2007-08 and profits grew from Rs53,000 crore to Rs91,000 crore. While number of loss making enterprises came down from 73 in 2003-04 to 55 in 2007-08, number of profit making enterprises has gone up from 143 to 158 during the same period.
Government approved implementation of guidelines on corporate governance in central public sector enterprises (CPSEs) in June 2007.
Corpus of National Investment Fund created out of disinvestment proceeds from Central PSUs stood at Rs1,815 crore as of 31 December 2008.
Financial Sector Reforms
NPAs of public sector anks declined from 7.8 per cent on 31 March 2004 to 2.3 per cent on 31 March 2008.
As a result of initiating process of amalgamation and recapitalization of Regional Rural Banks (RRBs) with negative net worth, 196 RRBs merged into 85 RRBs. The Government has contributed Rs652 crore for capitalisation of RRBs upto 31 December 2008.
Number of reforms undertaken in the last four years to deepen and widen the securities markets and strengthen the regulatory mechanisms for these markets.
The Companies Bill, 2008, undertaking comprehensive revision of Companies Act, 1956 to enable adoption of internationally accepted best practices, has been introduced in the Parliament.
Comprehensive reforms of tax system both direct and the indirect tax system have enabled the tax administration to enhance its functional efficiency and provide better tax payer services leading to increased compliance. Rates of Union Excise Duties and Service Tax rationalized for eventual shift to the Goods and Service Tax on 1 April 2010.
One hundred and nine marine vessels sanctioned for the Customs Department to prevent movements of contraband goods across the country's sea borders.
The enactment of the Right to Information Act at the centre and in many states ushering in greater accountability of the public servants.
Recommendations of the Sixth Central Pay Commission approved by the government has benefited over 4.5 million central government employees, including defence forces and para-military forces and over 3.8 million pensioners.