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Indian Budget 2007-08- Full Text of Budget Speech


11. The year 2007-08 will mark the beginning of the Eleventh Plan. The declared objective is "Faster and More Inclusive Growth". I can state with confidence that, on the eve of the Plan, the economy is in a stronger position than ever before. It therefore behoves us to set higher goals. The Approach Paper to the Eleventh Plan states that the Plan "will aim at putting the economy on a sustainable growth trajectory with a growth rate of approximately 10 per cent by the end of its period." Among the other objectives of the Plan are growth of 4 per cent in the agriculture sector, faster employment creation, reducing disparities across regions and ensuring access to basic physical infrastructure as well as health and education services to all. I have kept these objectives in mind while allocating resources to various sectors.

Gross Budgetary Support

12. Notwithstanding some constraints, I propose to increase substantially the Gross Budgetary Support (GBS) for the Plan. In 2006-07, the GBS was fixed at Rs.172,728 crore and, of this, support to the Central Plan was Rs.131,284 crore. GBS for 2007-08 will be increased to Rs.205,100 crore. Out of this, the Central Plan will receive Rs.154,939 crore.

Allocations for Major Sectors

13. For Bharat Nirman, as against Rs.18,696 crore (including the NER component) in 2006-07, I propose to provide Rs.24,603 crore in 2007-08, which marks an increase of 31.6 per cent.

14. The education and health sectors will also receive substantial funds. In 2007-08, I propose to enhance the allocation for education by 34.2 per cent to Rs.32,352 crore and for health and family welfare by 21.9 per cent to Rs.15,291 crore.

Sarva Shiksha Abhiyan and Mid-day Meal Scheme

15. In allocating resources, school education must have primacy. Hence, I propose to increase the allocation for school education by about 35 per cent from Rs.17,133 crore in 2006-07 to Rs.23,142 crore in 2007-08.

16. Out of this amount, Sarva Shiksha Abhiyan (SSA) will be provided Rs.10,671 crore. Further, I propose to increase the provision for strengthening teachers training institutions from Rs.162 crore to Rs.450 crore. Next year, we will appoint 200,000 more teachers and construct 500,000 more class rooms.

17. The Mid-day Meal Scheme will be provided Rs.7,324 crore next year. In addition to covering children in primary classes, beginning 2007-08, we propose to cover children in upper primary classes in 3,427 educationally backward blocks.

18. The transfer to Prarambhik Shiksha Kosh will increase from Rs.8,746 crore to Rs.10,393 crore.

19. As more students complete upper primary classes, it is necessary to increase access to secondary education. Schemes for this purpose are under formulation, and I propose to double the provision for secondary education from Rs.1,837 crore in 2006-07 to Rs.3,794 crore in 2007-08.

Means-Cum-Merit Scholarships

20. While the SSA has improved the enrolment ratio in schools to 96 per cent, the drop out ratio continues to be high. The critical year appears to be transition from class VIII to class IX. In order to arrest the drop out ratio and encourage students to continue their education beyond class VIII, I propose to introduce a National Means-cum-Merit Scholarship Scheme. Selection will be made through a national test from among students who have passed class VIII. Each student will be given Rs.6,000 per year for study in classes IX, X, XI and XII. I propose that 100,000 scholarships may be awarded every year. In order to fund this programme, I intend to create a corpus fund of Rs.750 crore this year, and add a like amount to the fund every year over the next three years. Accordingly, a sum of Rs.750 crore will be placed with the State Bank of India, and the yield from the fund will be used for awarding the scholarships.

Drinking Water and Sanitation

21. 55,512 habitations and 34,000 schools have been provided drinking water supply till December, 2006 under the Rajiv Gandhi Drinking Water Mission. More ambitious targets have been set for 2007-08 to deal with both non-coverage and slippage. I propose to enhance the allocation for the Mission from Rs.4,680 crore in 2006-07 to Rs.5,850 crore in 2007-08.

22. As regards the Total Sanitation Campaign, I propose to increase the provision from Rs.720 crore this year to Rs.954 crore next year.

Health Sector; National Rural Health Mission

23. In the second year of its implementation, the National Rural Health Mission (NRHM) is on schedule to meet its timelines. The institutional integration of all the health schemes at the district and lower levels has been achieved. All districts in the country will complete preparation of District Health Action Plans by March 2007. The major emphasis will be on mother and child care and on the prevention and treatment of communicable diseases such as tuberculosis and malaria. Through Monthly Health Days (MHD) organised at Anganwadi centres, convergence is sought to be achieved among various programmes such as immunization, ante natal care as well as nutrition and sanitation.

24. I am happy to report that 320,000 Associated Social Health Activists (ASHAs) have been recruited and over 200,000 have received orientation training. Besides, 90,000 link workers have been selected by the States. With trained ASHAs in place, I am confident there will be significant improvement in health care in rural areas. The Ayurveda, Yoga & Naturopathy, Unani, Sidha and Homeopathy (AYUSH) systems are also being mainstreamed into the health delivery system at all levels. I propose to increase the allocation for NRHM from Rs.8,207 crore in 2006-07 to Rs.9,947 crore in 2007-08.


25. Government has brought HIV/AIDS out of the closet and promised bold and determined efforts to achieve zero-level growth of the disease. The epidemic will be deemed 'stabilised' if the prevalence rate is less than one per cent of the population. National Aids Control Programme (NACP)-III, starting in 2007-08 and building on NACP-I and NACP-II, will target the high risk groups in all the States. We will expand access to condoms and ensure universal access to blood screening and safe blood. More hospitals will provide treatment to prevent transmission of HIV/AIDS from mother to child. Support will be given to the protocol on paediatric dosage developed by Indian doctors and launched in November 2006. For the year 2007-08, I propose to step up the provision for the AIDS control programme to Rs.969 crore.


26. Last year, I had expressed the hope that polio will be eliminated from the country by December 2007. However, there was an outbreak in western Uttar Pradesh in early 2006. The strategy for polio eradication has been revised. The number of polio rounds will be increased, monovalent vaccine will be introduced, and there will be intensive coverage in the 20 high risk districts of Uttar Pradesh and 10 districts of Bihar. The programme has been integrated into the NRHM. The ASHAs and the Anganwadi workers will visit every household and track every child for the immunization programme. To achieve the goal of eliminating polio, I propose to provide Rs.1,290 crore in 2007-08.

Integrated Child Development Services

27. In the second phase of expansion of the Integrated Child Development Services (ICDS), Government has sanctioned 173 ICDS projects, 107,274 Anganwadi centres and 25,961 mini-Anganwadi centres. Government is committed to expand the scheme in order to cover all habitations and settlements during the Eleventh Plan and to reach out to pregnant women, lactating mothers and all children below the age of six. I propose to increase the allocation for ICDS from Rs.4,087 crore in 2006-07 to Rs.4,761 crore in 2007-08.

National Rural Employment Guarantee Scheme

28. The National Rural Employment Guarantee Scheme (NREGS) was launched on February 2, 2006. The pace of implementation varies from State to State. Since NREGS is a demand-driven scheme carrying a legal guarantee of employment, the budget allocation would have to be supplemented according to need. I therefore propose to make an initial allocation of Rs.12,000 crore (including NER component) for NREGS. I am also happy to announce that NREGS will be expanded from the current level of 200 districts to 330 districts. In addition, I have provided Rs.2,800 crore for Sampoorna Gramin Rozgar Yojana (SGRY) for rural employment in the districts not covered by NREGS.

29. Swaranjayanti Gram Swarozgar Yojana (SGSY) is intended to promote self-employment among the rural poor through Self Help Groups (SHG). I propose to strengthen this programme by increasing the allocation from Rs.1,200 crore in the current year to Rs.1,800 crore (including NER component) next year.

Urban Unemployment

30. The issue of urban unemployment and poverty alleviation is equally critical. Hence, I propose to increase the allocation for Swarna Jayanti Shahari Rojgar Yojana from Rs.250 crore in 2006-07 to Rs.344 crore next year.

Jawaharlal Nehru National Urban Renewal Mission

31. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has evoked a positive response from State Governments. As on date, 538 projects with a total cost of Rs.23,950 crore have been sanctioned in sectors such as water supply, sanitation, transport, road and housing in many cities spread over several States. I propose to enhance the allocation from Rs.4,595 crore in 2006-07 to Rs.4,987 crore 2007-08.

Targeted Public Distribution System and Antyodaya Anna Yojana

32. The issue prices of food grains under the Public Distribution System (PDS) and for the beneficiaries of the Antyodaya Anna Yojana have been retained. A Plan scheme for evaluation, monitoring, management and strengthening of the targeted PDS will be implemented in 2007-08, and this will include computerisation of the PDS and an integrated information system in the Food Corporation of India.

Scheduled Castes and Scheduled Tribes

33. Continuing the practice that was started in 2005-06, a separate statement on the schemes for the welfare of Scheduled Castes (SCs) and Scheduled Tribes (STs) is placed in the Budget documents. The allocation in 2007-08 for SCs and STs has been substantially enhanced. In respect of schemes benefiting only SCs and STs, I have increased the allocation to Rs.3,271 crore. In respect of schemes with at least 20 per cent of the benefits earmarked for SCs and STs, I have increased the allocation to Rs.17,691 crore.

34. SC and ST students studying in M.Phil and PhD courses are supported by the Rajiv Gandhi National Fellowship Programme. I propose to enhance the allocation from Rs.35 crore in 2006-07 to Rs.88 crore in 2007-08.

Post-Matric Scholarships

35. There is a post-matric scholarship programme for SC and ST students. I propose to increase the provision for these scholarships from Rs.440 crore in 2006-07 to Rs.611 crore in 2007-08. I also propose to make a separate provision of Rs.91 crore for similar scholarships to be awarded to students belonging to socially and educationally backward classes.


36. Last year, I made a modest contribution of Rs.16.47 crore to the equity of the National Minorities Development and Finance Corporation (NMDFC). Following the Sachar Committee report, NMDFC would be required to expand its reach and intensify its efforts. Hence, I propose to provide a further sum of Rs.63 crore to the share capital of NMDFC.

37. There are a number of districts with a concentration of minorities. I propose to make a provision of Rs.108 crore for a multi-sector development programme in these districts.

38. Three scholarship programmes are being implemented for students belonging to minority communities. I propose to make the following allocations:

Pre-matric scholarships Rs.72 crore

Post-matric scholarships Rs.90 crore

Merit-cum-Means scholarships at

graduate and post-graduate levels Rs.48.60 crore


39. There is growing awareness of gender sensitivities of budgetary allocations. 50 ministries/departments have set up gender budgeting cells. For 2007-08, 27 ministries/departments and 5 Union Territories covering 33 demands for grants have contributed to a statement placed in the budget papers. The outlay for 100 per cent women specific programmes is Rs.8,795 crore and for schemes where at least 30 per cent is for women specific programmes is Rs.22,382 crore. We have made a sincere effort to remove the errors that were pointed out in last year's statement.

North Eastern Region (NER)

40. The total budget allocation in 2007-08 for the North Eastern Region, culled out from allocations under different ministries/ departments, has increased from Rs.12,041 crore in 2006-07 to Rs.14,365 crore in 2007-08. This includes Rs.1,380 crore provided to the Ministry of Development of North Eastern Region (DONER). The new industrial policy for NER, with suitable fiscal incentives, will be in place before March 31, 2007.

Supplement to the GBS

41. I have, so far, outlined the allocations under what may be called Plan 'A' which has a resource basket of Rs.205,100 crore. In consultation with the Planning Commission, I have also drawn up Plan 'B'. Since the Eleventh Plan will begin on April 1, 2007, we recognize that there will be a need to take new initiatives in critical areas. Additional resources will be needed once the proposals are finalised and the pace of expenditure builds up. Therefore, I shall endeavour to find additional resources through better tax administration to the extent of Rs.7,000 crore during the course of the year. I have been advised by the Planning Commission that these additional funds, once voted by this House, will be allocated among sectors such as agriculture, rural development, health, women and child development, urban infrastructure, water resources, etc.

42. I also have Plan 'C'. Under Plan 'C', I propose to tap into resources available outside the Budget and leverage them for the purpose of investment, especially in the infrastructure sector. I shall deal with this subject a little later.

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