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Indian Budget 2006-07- Full Text
Full Text of P. Chidambaram, Minister of Finance, Budget Speech(Feb 28, 2006)


13. Let me now present an overview of the Budget. Obviously, the bulk of the resources must go to the UPA Government’s eight flagship programmes: Sarva Siksha Abhiyan, Mid-day Meal Scheme, Rajiv Gandhi Drinking Water Mission, Total Sanitation Campaign, National Rural Health Mission, Integrated Child Development Services, National Rural Employment Guarantee Scheme and Jawaharlal Nehru National Urban Renewal Mission.

14. In 2005-06, Gross Budgetary Support (GBS) for the Plan was Rs.143,497 crore. Of this, support to the Central Plan was Rs.110,385 crore. I propose to increase both allocations substantially. GBS for 2006-07 has been fixed at Rs.172,728 crore, representing an increase of 20.4 per cent. Out of this, the Central Plan will receive a support of Rs.131,285 crore.

15. Education and health will continue to enjoy primacy. For 2006-07, the allocation for education has been enhanced by 31.5 per cent to Rs.24,115 crore and for health and family welfare by 22.0 per cent to Rs.12,546 crore.

16. On the eight flagship programmes, the total allocation in 2005-06 was Rs.34,927 crore. In the ensuing fiscal year, the total allocation will be Rs.50,015 crore, representing an additionality of Rs.15,088 crore or 43.2 per cent.

North Eastern Region (NER)

17. To this, however, we must add the allocation of 10 per cent of the Plan Budget of each Ministry/Department for schemes and programmes in the North Eastern Region (NER). For the flagship programmes alone, this would amount to an additional allocation of Rs.4,870 crore in 2006-07. The total budget allocation for the NER is Rs.12,041 crore which includes Rs.1,350 crore provided to the Ministry of Development of North Eastern Region (DONER). From BE 2005-06 to BE 2006-07, the step up is 18 per cent.

Sarva Siksha Abhiyan

18. Sarva Siksha Abhiyan (SSA) has recorded remarkable progress in 2005-06 in terms of new schools, additional class rooms and additional teachers. Two independent surveys show that 93 per cent of the children in the age group 6-14 years are in school, and the number of children not in school has come down to about one crore. Recognizing good performance, I propose to increase the outlay for SSA from Rs.7,156 crore to Rs.10,041 crore in 2006-07. 500,000 additional class rooms will be constructed and 150,000 more teachers will be appointed.

19. In 2006-07, we shall transfer Rs.8,746 crore to the Prarambhik Siksha Kosh from the revenues raised through the education cess.

Mid-day Meal Scheme

20. 12 crore children are now covered under the Mid-day Meal Scheme, which is the largest school lunch programme in the world. I propose to enhance the allocation from Rs.3,010 crore to Rs.4,813 crore in 2006-07.

Drinking Water and Sanitation

21. The target for the current year for drinking water supply will be completed, and 56,270 habitations and 140,000 schools will be covered. Apart from non-coverage, there is the persistent problem of slippage. The strategy to tackle both includes conservation, better operational management, and water quality monitoring and capacity building at the village level. The Government will provide non-recurring assistance of Rs.213 crore in 2006-07 for setting up district-level water testing laboratories and field-level water testing kits. I propose to increase the provision for the Rajiv Gandhi National Drinking Water Mission from Rs.3,645 crore to Rs.4,680 crore next year.

22. I also propose to increase the provision for the Rural Sanitation Campaign from Rs.630 crore to Rs.720 crore in 2006-07.

National Rural Health Mission

23. The National Rural Health Mission was launched on April 12, 2005. I am confident that in 2006-07 more than 200,000 Associated Social Health Activists (ASHA) will be fully functional and over 1,000 block level community health centres will provide round the clock services. I have increased the allocation for NRHM from Rs.6,553 crore to Rs.8,207 crore for the next year.

24. The WHO standard defining ‘elimination of leprosy’ is one case per 10,000 population. I am happy to announce that the goal of eliminating leprosy was reached in December, 2005. Continuing the vigorous immunization programme, we hope to eliminate polio too from the country by December, 2007.

Integrated Child Development Services

25. We have expanded the Integrated Child Development Services (ICDS) scheme and created an additional 188,168 centres. Supplementary nutrition is the most important component of the scheme. Beginning this year, the Centre is assisting the States to the extent of 50 per cent of the actual expenditure incurred for supplementary nutrition or 50 per cent of the cost norms, whichever is less. The cost to the Centre this year is estimated at Rs.1,500 crore, and I propose to increase this assistance to Rs.1,700 crore for 2006-07. The total allocation for ICDS is being increased from Rs.3,315 crore to Rs.4,087 crore.

National Rural Employment Guarantee Scheme

26. I have already referred to the Rural Employment scheme which is the primary instrument to combat rural unemployment and hunger poverty. For 2006-07, the total allocation for rural employment will be Rs.14,300 crore. Of this, Rs.11,300 crore (including NER component) will be under the NREG Act and Rs.3,000 crore (including NER component) will be under SGRY. Since there is a legal guarantee of employment under the NREG Act, more funds will be provided according to need.

Jawaharlal Nehru National Urban Renewal Mission

27. The Jawaharlal Nehru National Urban Renewal Mission was launched on December 3, 2005. For the next year, against the estimated outlay of Rs.6,250 crore, I propose to provide a grant of Rs.4,595 crore. Apart from the four projects, including Mumbai metro rail and Bangalore metro rail, mentioned in my Budget speech last year, the projects under active consideration include projects in Maharashtra, Madhya Pradesh and Gujarat.

28. Planned urbanization can act as a spur to growth, employment and a better quality of life. Government will actively promote the establishment of new towns, preferably focussed on a specific industry, for example Information Technology, or a specific theme, for example education or health. Some projects are on the anvil in West Bengal and Karnataka.

National Social Assistance Programme

29. Old age pensions are granted under the National Social Assistance Programme (NSAP) to destitute persons above the age of 65 years at Rs.75 per month. This is woefully inadequate. I propose to increase the pension to Rs.200 per month. I have provided Rs.1,430 crore for 2006-07 and additional funds, if required, will be provided during the course of the year. I would urge State Governments to make an equal contribution from their resources so that a destitute pensioner would get at least Rs.400 per month. I also propose to work with the Department of Posts and the banks to establish, within two years, a system under which the pension will be credited directly to the account of the beneficiary in a post office or a bank.

Women and Children

30. Last year, I introduced a statement highlighting the gender sensitivities of the budgetary allocations. I was able to cover 10 demands for grants. This time, I have been able to enlarge the statement on gender budgeting to include schemes where 100 per cent of the allocation is for the benefit of women as well as schemes where at least 30 per cent of the allocation is targeted towards women. The statement now covers 24 demands for grants in 18 Ministries/Departments and five Union Territories and schemes with an outlay of Rs.28,737 crore.

31. Furthermore, several Ministries and Departments have initiated an exercise to prepare a public expenditure profile of their budgets from a gender perspective. 32 Ministries and Departments have set up Gender Budgeting Cells.

Scheduled Castes and Scheduled Tribes

32. Government is committed to the welfare of Scheduled Castes (SCs) and Scheduled Tribes (STs). Honourable Members will be happy to know that this Budget, like last year’s, contains a separate statement on the schemes for the welfare and development of SCs and STs. On a like to like basis, the allocations for schemes benefiting only SCs and STs have been enhanced by 14.5 per cent to Rs.2,902 crore and the allocations for schemes with at least 20 per cent allocation for SCs and STs have been enhanced by 13.9 per cent to Rs.9,690 crore.

33. The equity contribution to the National SC Finance and Development Corporation is being increased to Rs.37 crore and to the National Safai Karamchari Finance and Development Corporation to Rs.80 crore in 2006-07.


34. I propose to extend greater financial support to the organizations actively involved in the welfare of the minorities. Accordingly, I intend to double the corpus fund of the Maulana Azad Educational Foundation to Rs.200 crore.

35. I propose to contribute Rs.16.47 crore to strengthen the equity base of the National Minorities Development and Finance Corporation. In line with the Prime Minister’s announcement on August 15, 2005, the Corporation will intensify its efforts to reach out to artisans and weavers living in urban and peri-urban centres, especially in districts with concentration of minorities. The programme will focus on skill enhancement, credit and techno-managerial support.

36. I propose to increase the allocation to the National Council for Promotion of Urdu Language from Rs.10 crore to Rs.13 crore.

37. Merit-cum-means based scholarships encourage students to pursue higher studies. Government will finance 20,000 such scholarships to students belonging to the minority communities. Once the scheme is finalized in 2006-07, I intend to allocate the necessary funds.

Kasturba Gandhi Balika Vidyalaya Scheme

38. The initial results of the Kasturba Gandhi Balika Vidyalaya Scheme launched in 2004 are encouraging. 1,000 new residential schools for girls from SC, ST, OBC and minority communities will be opened in 2006-07. I have provided Rs.128 crore, and I have agreed to provide an additional sum of Rs.172 crore during the year. I propose to provide a further incentive to the girl child who passes the VIII Standard Examination and enrols in a secondary school. A sum of Rs.3,000 will be deposited in her name, and she would be entitled to withdraw it on reaching 18 years of age.

39. Government has shifted the emphasis from sheer ‘quantity’ to the ‘quality’ of the outcome of the various social sector programmes. To ensure value for public expenditure, an Outcome Budget was presented on August 25, 2005. Government intends to present a Performance Budget on the first Outcome Budget before the end of the Budget Session. The Outcome Budget for 2006-07 will be placed before this House by March 17, 2006. This new approach underscores our resolve to ensure that the intended services in the right quantity and quality are delivered to the aam admi.

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