Services like schooling, housing and nutrition have the largest claim (Rs 83,950.69 crore) on total plan allocation in India's latest budget. Together with energy and transport, the social sector accounts for nearly 75% of the total allocation of Rs 319,992 crore

A 35% increase on education spending and a 22% hike in allocations for public health and family welfare are highlights of India's Union Budget 2007-2008. Presented by the country's Finance Minister P Chidambaram to Parliament on February 28, Budget 2007-08 also has new schemes for disadvantaged sections of the population like the physically challenged, the elderly and landless rural families.

Maintaining high priority for eight flagship programmes of the UPA government -- including the National Rural Employment Guarantee Scheme, Bharat Nirman, and the National Rural Health Mission -- the finance minister's fourth budget pegs gross budgetary support for the coming fiscal at Rs 205,100 crore, of which the central plan will be Rs 154,939 crore.

Allocation to the education sector has been increased by 34.2%, to Rs 32,352 crore. An amount of Rs 23,142 crore has been allocated for school education programmes, as against Rs 17,133 crore in 2006-07.

The Sarva Shiksha Abhiyan (Universal Education Programme) gets Rs 10,671 crore and the mid-day meal scheme will be extended to upper primary classes in 3,427 educationally-backward blocks.

Two lakh more teachers are to be employed and 5 lakh more classrooms constructed in primary schools, the finance minister said.

The secondary education allowance will be doubled from Rs 1,837 crore to Rs 3,794 crore.

Chidambaram also proposed the implementation of national means-cum-merit scholarships with an allocation of Rs 6,000 to every child who completes Classes 9 to 12, to lessen school dropout rates.

Enhanced allocations for SC/ST scholarships from Rs 440 crore to Rs 611 crore and a scholarship programme for students from minority communities were also announced. The allocation for the latter is Rs 72 crore at the higher secondary school level, and Rs 48 crore for graduate and postgraduate students.

Besides education, allocations for health and family welfare have been hiked substantially by 21.9% to Rs 15,291 crore. The hike in allocations to these sectors is almost identical to those in the previous two budgets.

Prime Minister Dr Manmohan Singh reiterated that the prime focus of Union Budget 2007-08 was education and healthcare, in keeping with his government's commitment to increase spending on the country's social infrastructure. "Education and healthcare are the primary imperatives as far as this budget is concerned." Dr Singh added that there was a need to improve the skill level of India's population, and therefore special emphasis was being laid on secondary education.

The prime minister said the budgetary emphasis was also on improving access to social services and providing a social safety net. Therefore, 70 lakh households are to be covered under a social welfare scheme with the Life Insurance Corporation (LIC) and with support from state governments. Of this, 50% of the premium, at Rs 200 per household, will be given by the Centre. LIC will maintain a Rs 1,000 crore fund for the purpose.

In a scheme for economically weak sections of the population, the ceiling of loans under the differential rate of interest scheme would be raised from Rs 6,500 to Rs 15,000, and for housing loans from Rs 5,000 to Rs 20,000. Insurance companies will launch a senior citizens scheme in 2007-08.

Chidambaram also announced that the government would create 1 lakh jobs for the physically challenged.

The budgetary allocation for scheduled castes and scheduled tribes (SC/STs) is to be increased to Rs 3,271 crore in the coming financial year. And, finally, Rs 63 crore has been earmarked for share capital for the National Minorities Development Finance Corporation following the Sachar Committee recommendations.

The budget continues to focus on agriculture for the fourth consecutive year, with substantial increases in funds for farm credit, subsidies and extension of irrigation coverage. The rural infrastructure improvement programme, Bharat Nirman, has been given Rs 24,603 crore, an increase of 31.6% over the current year.

These, together with Rs 12,000 crore for expansion of the National Rural Employment Guarantee Scheme to 330 districts, from the current 200, are other key features of Budget 2007-08.

Source: Reuters, February 28, 2007
PTI, February 28, 2007
www.expressindia.com, February 28, 2007
www.business-standard.com, February 28, 2007