Presenting the interim
Budget for 2009-10 in Lok Sabha, acting Finance Minister Pranab
Mukherjee claimed in Parliament on Monday that every effort has been
made to fulfil promises made to the common man.
Highlights of the Interim Budget 2009-10:The
Gross Domestic Product increased by 7.5 per cent, 9.5 per cent, 9.7
percent and 9 per cent in the first four years from fiscal year 2004-05
to 2007-08 recording a sustained growth of over 9 per cent for three
consecutive years for the first time. The growth drivers for the period
were agriculture, services, manufacturing along with trade and
construction. Fiscal deficit 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 The Year 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 December 7, 2008 and January 2, 2009
providing tax relief to boost demand and increasing expenditure on
public projects. Government accorded approval to 37 infrastructure projects worth Rs 70,000 crore from August, 2008 to January, 2009 alone. Under
PPP mode, 54 Central Sector infrastructure projects with a project cost
of Rs 67,700 crore given in-principal or final approval and 23 projects
amounting to Rs 27,900 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 Rs 1,00,000 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,
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
US$ 32.4 billion FDI received in 2007-08 and notwithstanding financial
uncertainty and slowdown, FDI inflows during April-November, 2008 were
US$ 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 Achievement
Agriculture
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 Rs 25,000 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 Rs 87,000 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 upto Rs 3 lakh
at 7 per cent per annum. The Agricultural Debt Waiver and
Debt Relief Scheme, 2008 was implemented by June 30, 2008 as scheduled.
Debt waiver/debt relief amounting to Rs 65,300 crore covers 3.6 crore
farmers. 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 Rs 550 per quintal in 2003-04 to Rs 900
per quintal for the crop year 2008-09. In case of wheat, increase was
from Rs 630 per quintal in 2003-04 to Rs 1080 per quintal for the year
2009. Rural Development The corpus of Rural Infrastructure
Development Fund (RIDF) increased from Rs.5,500 crore in 2003-04 to Rs
14,000 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 December, 2008. 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. Education
Major
initiatives including a new Centrally Sponsored Scheme launched to
universalize 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. 2 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 Rs 4,500 crore as on March, 31, 2004 to Rs
24,260 crore as on September 30, 2008. 500 ITIs upgraded into
centers of excellence. National Skill Development Corporation created
in July, 2008 with initial corpus of Rs 1,000 crore. Social Sector
Authorised
capital of National Safai Karamchari Finance and Development
Corporation (NSKFDC) is being raised from Rs 200 crore to Rs 300 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 authorized 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. 146 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 Rs 200 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. 22 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 Rs 5,87,000 crore
in 2003-04 to Rs 10,81,000 crore in 2007-08 and profits grew from Rs
53,000 crore to Rs 91,000 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 Rs 1,815 crore as on
December 31, 2008. Financial Sector Reforms
NPAs of Public Sector Banks declined from 7.8 per cent on March 31, 2004 to 2.3 per cent on March 31, 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 Rs 652 crore for
capitalization of RRBs upto December 31, 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. Tax Effort
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 1st April, 2010. 109
marine vessels sanctioned for the Customs Department to prevent
movements of contraband goods across the country's sea borders. Administrative Reforms
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 45 lakh Central Government employees including Defence
Forces and Para-Military forces and over 38 lakh pensioners. Revised Estimates
The
total expenditure at Rs 7,50,884 crore in B.E. 2008-09 revised to Rs
9,00,953 crore in R.E. 2008-09 showing an increase of Rs 1,50,069
crore. Plan Expenditure gone up from Rs 2,43,386 crore in B.E. 2008-09 to Rs 2,82,957 crore in R.E. 2008-09. Non-Plan expenditure increased by Rs 1,10,498 crore in R.E. 2008-09 over B.E. 2008-09. Revised Estimate 2008-09 for Non-Tax Revenues increased from Rs 95,785 crore in Budget Estimate 2008-09 to Rs 96,203 crore. Revised
Estimates of gross tax collection projected at Rs 6,27,949 crore as
against B.E. 2008-09 of Rs 6,87,715 crore, primarily due to pro-active
fiscal measures initiated to counter the impact of global slowdown on
the Indian economy. Revised Revenue deficit to be at Rs
2,41,273 crore (4.4 per cent of GDP) as against budgeted figure of Rs
55,184 crore (1 per cent of GDP). Fiscal deficit to go up from Rs 1,33,287 crore (2.5 per cent of GDP) in B.E. 2008-09 to Rs 3,26,515 crore (6 per cent of GDP). Budget Estimates
Total
expenditure for fiscal 2009-10 estimated at Rs 9,53,231 crore. Plan
expenditure estimated at Rs 2,85,149 crore and Non-Plan expenditure at
Rs 6,68,082 crore. Budgetary support in Plan B.E. 2009-10 in
comparison to B.E. 2008-09 increased for Department of Rural
Development, Department of Road Transport & Highways, Railways,
Ministry of Power, Department of Industrial Policy and Promotion and
Department of Information Technology to meet the requirements of rural
and infrastructure development along with higher allocation for
Ministry of Youth Affairs & Sports and Ministry of Culture to
ensure adequate resources for hosting of the Commonwealth Games.
Allocations to flagship programme which directly impact 'Aam Aadmi'
fully protected. Rs.30,100 crore allocated for National Rural
Employment Guarantee Scheme for the year 2009-10. In 2008-09 employment
of 138.76 crore person days covering 3.51 crore household already
generated. 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 Rs
13,100 crore proposed for 2009-10. Rs 8,000 crore allocated for Mid-day Meals Scheme for the year 2009-10. Allocation
of Rs 6,705 crore proposed for Integrated Child Development Scheme
(ICDS) for the year 2009-10. New WHO child growth standards adopted for
monitoring growth of children under ICDS. 386 projects
amounting to Rs 39,000 crore sanctioned till December 31, 2008 under
Jawaharlal Nehru National Urban Renewal Mission (JNNURM). Allocation of
Rs.11,842 crore proposed for the year 2009-10. Rs.7,400 crore
allocated for Rajiv Gandhi Rural Drinking Water Mission, Rs 1,200 crore
for Rural Sanitation Programme, Rs 12,070 crore for National Rural
Health Mission, Rs 40,900 crore allocated for Bharat Nirman for the
year 2009-10. A provision of Rs 100 crore in the Annual Plan 2009-10 made for Unique Identification Authority of India. RIDF-XV proposed with a corpus of Rs 14,000 crore. Separate window for rural roads to continue with a corpus of Rs 4,000 crore. Interest
subvention of 2 per cent on pre and post shipment credit for certain
employment oriented sectors i.e. Textiles (including handlooms &
handicrafts), Carpets, Leather, Gem & Jewellery, Marine products
and SMEs extended beyond March 31, 2009 till September 30, 2009
involving an additional financial outgo of Rs.500 crore. Government
to recapitalize 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. Allocation for Defence increased to Rs 1,41,703 crore which includes Rs 54,824 for Capital Expenditure. Major subsidies including food, fertilizer and petroleum estimated at Rs 95,579 crore. For
the fiscal 2009-10, with Centre's net tax revenue estimated at Rs
5,00,096 crore and Revenue expenditure at Rs 8,48,085 crore, revenue
deficit is estimated at 4 per cent of GDP and fiscal deficit at 5.5 per
cent of GDP.
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