He announced Rs. He also proposed to spend Rs. Capital investment in fertilizer production is proposed to be included as an infrastructure sub-sector since investment in the sector is capital intensive. Remuneration for Anganwadi workers have been increased to Rs. This will be effective from 1 st April benefiting about 22 lakh Anganwadi workers and helpers. Sarva Shiksha Abhiyan gets Rs. The Finance Minister also proposed to introduce a scholarship scheme for needy students belonging to the Scheduled Castes and Scheduled Tribes studying in classes IX and X.

It would benefit about 40 lakh students. Plan allocation for Health has also been increased by 20 per cent to Rs. The Rashtriya Swasthaya Bima Yojana will be extended to the unorganized sector workers in hazardous mining and associated industries.

He also proposed to infuse Rs. He also proposed to create a micro finance equity fund of Rs. Interest subvention of 1 per cent on housing loans will now be available for loans upto Rs.

The present limit for the loan amount is Rs. The total plan expenditure has been increased by The gross tax receipts are estimated to grow by While, like last year, I seek the blessings of Lord Indra to bestow on us timely and bountiful monsoons, I would pray to Goddess Lakshmi as well. I think it is a good strategy to diversify one's risks. Sustaining Growth In my last Budget, I had started rolling back the fiscal stimulus implemented over and to mitigate the impact of the global financial crisis on economic slowdown in India.

In the course of the year, I have moved further on that path. I believe that a part of the current recovery must be stored away to build future resilience. Indeed, a counter cyclical fiscal policy is our best insurance against external shocks and localised domestic factors. Fiscal Consolidation The experience with Fiscal Responsibility and Budget Management Act, FRBM Act at Centre and the corresponding Acts at State level show that statutory fiscal consolidation targets have a positive effect on macroeconomic management of the economy.

In the course of the year the Central Government would introduce an amendment to the FRBM Act, laying down the fiscal road map for the next five years. The Thirteenth Finance Commission has worked out a fiscal consolidation road map for States requiring them to eliminate revenue deficit and achieve a fiscal deficit of 3 per cent of their respective Gross State Domestic Product latest by It has also recommended a combined States' debt target of A Middle Office is already operational.

Tax Reforms These reforms will result in moderation of rates, simplification of laws and better compliance. After receiving the report of the Standing Committee, we shall be able to finalise the Code for its enactment during This has been a pioneering effort in participative legislation.

The Code is proposed to be effective from April 1, to allow taxpayers, practitioners and administrators to fully understand the legislation and adjust to the revised procedures. Unlike DTC, decisions on the GST have to be taken in concert with the States with whom our dialogue has made considerable progress in the last four years.

Areas of divergence have been narrowed. Among the other steps that are being taken for the introduction of GST is the establishment of a strong IT infrastructure. The key business processes of registration, returns and payments are in advanced stages of finalisation. Expenditure Reforms The effective management of public expenditure is an integral part of the fiscal consolidation process.

Expenditure has to be oriented towards the production of public goods and services. The extant classification of public expenditure between plan, non-plan, revenue and capital spending needs to be revisited. This is necessary as one recognises the importance of service sector and the knowledge economy for our development.

A Committee under Dr. Rangarajan has been set up by the Planning Commission to look into these issues. Subsidies During the year , the Nutrient Based Subsidy NBS policy was successfully implemented for all fertilisers except urea. The policy has been well received by all stakeholders, and the availability of fertilisers has improved. The extension of the NBS regime to cover urea is under active consideration of the Government.

The Government provides subsidies, notably on fuel and food grains, to enable the common man to have access to these basic necessities at affordable prices. A significant proportion of subsidised fuel does not reach the targeted beneficiaries and there is large scale diversion of subsidised kerosene oil.

A recent tragic event has highlighted this practice. We have deliberated for long the modalities of implementing such subsidies. The debate now has to make way for decision.

To ensure greater efficiency, cost effectiveness and better delivery for both kerosene and fertilisers, the Government will move towards direct transfer of cash subsidy to people living below poverty line in a phased manner. A task force headed by Shri Nandan Nilekani has been set-up to work out the modalities for the proposed system of direct transfer of subsidy for kerosene, LPG and fertilisers.

The interim report of the task force is expected by June The system will be in place by March People's Ownership of PSUs The six public issues of CPSUs in the current financial year have attracted around 50 lakh retail investors.

As against a target of Rs40, crore, the Government will raise about Rs22, crore from disinvestment in A higher than anticipated realisation in non-tax revenues has led us to reschedule some of the divestment issues planned for the current year.

I intend to maintain the momentum on disinvestment in by raising Rs40, crore. Let me reiterate here that the Government is committed to retain at least 51 per cent ownership and management control of the CPSUs, as stated earlier in my Budget speech for Investment Environment Foreign Direct Investment To make the FDI policy more user-friendly, all prior regulations and guidelines have been consolidated into one comprehensive document, which is reviewed every six months.

The last review has been released in September This has been done with the specific intent of enhancing clarity and predictability of our FDI policy to foreign investors. Discussions are underway to further liberalise the FDI policy. Foreign Institutional Investors To liberalise the portfolio investment route, it has been decided to permit SEBI registered Mutual Funds to accept subscriptions from foreign investors who meet the KYC requirements for equity schemes.

This would enable Indian Mutual Funds to have direct access to foreign investors and widen the class of foreign investors in Indian equity market. To enhance the flow of funds to the infrastructure sector, the FII limit for investment in corporate bonds, with residual maturity of over five years issued by companies in infrastructure sector, is being raised by an additional limit of US Dollar 20 billion taking the limit to US Dollar 25 billion.

Since most of the infrastructure companies are organised in the form of SPVs, FIIs would also be permitted to invest in unlisted bonds with a minimum lock-in period of three years. However, the FIIs will be allowed to trade amongst themselves during the lock-in period. Financial Sector legislative Initiatives The financial sector reforms initiated during the early s have borne good results for the Indian economy.

The UPA Government is committed to take this process further. In my last Budget speech, I had announced that Reserve Bank of India would consider giving some additional banking licences to private sector players. Accordingly, RBI issued a discussion paper in August, , inviting feedback from the public. I propose to bring suitable legislative amendments in this regard in this session.

RBI is planning to issue the guidelines for banking licences before the close of this financial year. Public Sector Bank Recapitalisation Recapitalisation of Regional Rural Banks As a part of financial strengthening of Regional Rural Banks, an amount of Rs crore was given to these banks during this year. I propose to provide Rs crore during to enable them maintain a CRAR of at least 9 per cent as on March 31, Micro Finance Institutions Creation of a dedicated fund for providing equity to smaller MFIs would help them maintain growth and achieve scale and efficiency in operations.

The Committee set up by RBI to look into issues relating to micro finance sector in India has submitted its report. The Government is considering putting in place appropriate framework to protect the interests of small borrowers. Rural Infrastructure Development Fund This is popular among State Governments. The additional allocation would be dedicated to creation of warehousing facilities.

Micro, Small and Medium Enterprises Micro and Small enterprises play a crucial role in furthering the objective of equitable and inclusive growth. For the year , I propose to provide Rs5, crore to SIDBI for the same purpose out of the shortfall of banks on priority sector lending targets.

Handloom weavers have been facing economic stress. Consequently, many of them have not been able to repay debts to handloom weaver cooperative societies which have become financially unviable.

The initiative would benefit 15, cooperative societies and about 3 lakh handloom weavers. The details of the scheme would be worked out by the Ministry of Textiles in consultation with Planning Commission. I am happy to report that the outstanding loans to minority communities which stood at 13 per cent of total priority sector lending at the end of last year have increased to I have directed the Public Sector Banks to achieve the target of 15 per cent at the earliest.

Housing Sector Finance To further stimulate growth in housing sector, I am liberalising the existing scheme of interest subvention of 1 per cent on housing loans by extending it to housing loan upto Rs15 lakh where the cost of the house does not exceed Rs25 lakh from the present limit of Rs10 lakh and Rs20 lakh respectively. On account of increase in prices of residential properties in urban areas, I propose to enhance the existing housing loan limit from Rs20 lakh to Rs25 lakh for dwelling units under priority sector lending.

To provide housing finance to targeted groups in rural areas at competitive rates, I propose to enhance the provision under Rural Housing Fund to Rs3, crore from the existing Rs2, crore. This Registry will become operational by March 31, Financial Sector Legislative Reforms Commission It would rewrite and streamline the financial sector laws, rules and regulations and bring them in harmony with the requirements of a modern financial sector.

The Commission will complete its work in 24 months. The proposed bill will be introduced in the Lok Sabha in the current session. Agriculture Agriculture development is central to our growth strategy.

Measures taken during the current year have started attracting private investment in agriculture and agro-processing activities. This process has to be deepened further. In the Budget for , I had delineated a four-pronged strategy covering agricultural production, reduction in wastage of produce, credit support to farmers and a thrust to the food processing sector.

These initiatives have started showing results but there are other issues in our food economy that require attention. The recent spurt in food prices was driven by increase in the prices of items like fruits and vegetables, milk, meat, poultry and fish, which account for more than 70 per cent of the WPI basket for primary food items.

Removal of production and distribution bottlenecks for these items will be the focus of my attention this year. Bringing Green Revolution to Eastern Region The Green Revolution in Eastern Region is waiting to happen. To realize the potential of the region, last year's initiative will be continued in with a further allocation of Rs crore. Integrated Development of 60, pulses villages in rainfed areas Government's initiative on pulses has received a positive response from the farmers.

As per the second advance estimates, a record production of lakh tonnes of pulses is expected this year as against lakh tonnes last year. While consolidating these gains, we must strive to attain self-sufficiency in production of pulses within next three years.

I propose to provide an amount of Rs crore to promote 60, pulses villages in rainfed areas for increasing crop productivity and strengthening market linkages. Promotion of Oil Palm The domestic production of edible oil meets only about 50 per cent demand. The gap in supply is met through imports, which are often at high prices due to the quantum of our requirement.

Our recent interventions and good rains are expected to result in a higher oilseeds production of lakh tonnes in as against lakh tonnes in To achieve a major breakthrough, we have to pay special attention to oil palm as it is one of the most efficient oil crops. I propose to provide an amount of Rs crore to bring 60, hectares under oil palm plantation, by integrating the farmers with the markets. The initiative will yield about 3 lakh metric tonnes of palm oil annually in 5 years.

Initiative on Vegetable Clusters The growing demand for vegetables has to be met by a robust increase in the productivity and market linkage. An efficient supply chain, to provide quality vegetables at competitive prices will have to be established.

I propose to provide an amount of Rs crore for implementation of vegetable initiative to set in motion a virtuous cycle of higher production and incomes for the farmers. To begin with, this programme will be launched near major urban centres. Nutri-cereals While we ensure food for all, we must also promote balanced nutrition. Bajra, jowar, ragi and other millets are highly nutritious and are known to possess several medicinal properties.

The availability and consumption of these Nutri-cereals is, however, low and has been steadily declining over recent years. A provision of Rs crore is being made to promote higher production of these cereals, upgrade their processing technologies and create awareness regarding their health benefits.

This initiative would provide market linked production support to ten lakh millet farmers in the arid and semi-arid regions of the country. The programme would be taken up in compact blocks covering about 25, villages. This will help improve nutritional security and increase feed and fodder supply for livestock.

National Mission for Protein Supplements The consumption of foods rich in animal protein and other nutrients has risen of late, with demand growing faster than production. The National Mission for Protein Supplements is being launched in with an allocation of Rs crore. It will take up activities to promote animal based protein production through livestock development, dairy farming, piggery, goat rearing and fisheries in selected blocks.

Accelerated Fodder Development Programme Adequate availability of fodder is essential for sustained production of milk. It is necessary to accelerate the production of fodder through intensive promotion of technologies to ensure its availability throughout the year. I propose to provide Rs crore for Accelerated Fodder Development Programme which will benefit farmers in 25, villages.

Hon'ble Members may be curious as to why all these new initiatives are being launched with an allocation of Rs crore. Well, the number 3 happens to be my lucky number! National Mission for Sustainable Agriculture While the need to maximize crop yields to meet the growing demand for food grains is critical, we have to sustain agricultural productivity in the long run.

There has been deterioration in soil health due to removal of crop residues and indiscriminate use of chemical fertilizers, aided by distorted prices. To address these issues, the Government proposes to promote organic farming methods, combining modern technology with traditional farming practices like green manuring, biological pest control and weed management.

Agriculture Credit To get the best from their land, farmers need access to affordable credit. Banks have been consistently meeting the targets set for agriculture credit flow in the past few years. For the year , I am raising the target of credit flow to the farmers from Rs3,75, crore this year to Rs4,75, crore in Banks have been asked to step up direct lending for agriculture and credit to small and marginal farmers.

The existing interest subvention scheme of providing short term crop loans to farmers at 7 per cent interest will be continued during In the last budget, I had provided an additional 2 per cent interest subvention to those farmers who repay their crop loans on time. The response to this scheme has been good.

In order to provide further incentive to these farmers, I propose to enhance the additional subvention to 3 per cent in Thus, the effective rate of interest for such farmers will be 4 per cent per annum. In view of the enhanced target for flow of agriculture credit, I propose to strengthen NABARD's capital base by infusing Rs crore, in a phased manner, as Government equity. This would raise its paid-up capital to Rs5, crore. Mega Food Parks Despite growing production of vegetables and fruits, their availability is inadequate due to bottlenecks in retailing capacity.

An estimated 40 per cent of the fruit and vegetable production in India goes waste due to lack of storage, cold chain and transport infrastructure. So far, 15 such parks have been sanctioned. During , approval is being given to set up 15 more Mega Food Parks.

Storage Capacity and Cold Chains The years to saw very high levels of foodgrain procurement. On January 1, , the foodgrain stock in Central pool reached lakh metric tonnes, 2. The storage capacity for such large quantities requires augmentation. Process to create new storage capacity of lakh metric tonnes through private entrepreneurs and warehousing corporations has been fast tracked.

Decision to create 20 lakh metric tonnes of storage capacity under Public Entrepreneurs Guarantee PEG Scheme through modern silos has been taken. While we will be able to add about 2. During , another 24 lakh metric tonnes of storage capacity has been created under the Rural Godown Scheme. Investment in cold storage projects is now gaining momentum. During this year, 24 cold storage projects with a capacity of 1. In addition, cold storage projects with a capacity of over 5 lakh metric tonnes have been approved by the National Horticulture Board.

To attract investment in this sector, henceforth, capital investment in the creation of modern storage capacity will be eligible for viability gap funding scheme of the Finance Ministry. It is also proposed to recognize cold chains and post-harvest storage as an infrastructure sub-sector. Agriculture Produce Marketing Act The recent episode of inflation in vegetables and fruits has exposed serious flaws in our supply chains.

The government regulated mandis sometimes prevent retailers from integrating their enterprises with the farmers. Infrastructure and Industry Infrastructure is critical for our development. For , an allocation of over Rs 2,14, crore is being made for this sector, which is This amounts to Our experience with PPP model for creation of public sector assets in the country has been good.

We have recently launched the National Capacity Building Programme to enhance capacities of public functionaries in identifying, conceptualising, structuring and managing PPPs. It is our endeavour to come up with a comprehensive policy that can be used by the Centre and the State Governments in further developing public-private partnerships.

It is expected to achieve a cumulative disbursement target of Rs20, crore by March 31, and Rs25, crore by March 31, The take out financing scheme announced in the Budget has been implemented and seven projects have been sanctioned with a debt of Rs1, crore.

Another Rs5, crore will be sanctioned during In order to give a boost to infrastructure development in railways, ports, housing and highways development, I propose to allow tax free bonds of Rs30, crore to be issued by various Government undertakings in the year To attract foreign funds for the infrastructure financing, I propose to create Special Vehicles in the form of notified infrastructure debt funds. I will come to the details in Part B of my speech. National Manufacturing Policy For sustained growth of GDP and productive employment for younger generation, it is imperative that the growth in manufacturing sector picks up.

We expect to take the share of manufacturing in GDP from about 16 per cent to 25 per cent over a period of ten years. Government will come out with a manufacturing policy, which will bring down the compliance burden on the industry through self-regulation and help make Indian industry globally competitive.

To address the need for greater transparency and accountability in procurement policy and allocation, pricing and utilisation of natural resources, the Government has set up two committees. The recommendations will be available within three months.

A Group of Ministers has been set up to consider all issues relating to reconciliation of environmental concerns emanating from various departmental activities including those related to infrastructure and mining. This Group will also suggest changes in the existing statutes, rules, regulations and guidelines and make its recommendations in a time bound manner.

The Indian automobile market is the second fastest growing in the world and has shown nearly 30 per cent growth this year. World over, substantial investments are being made in the field of hybrid and electric mobility. To provide green and clean transportation for the masses, National Mission for Hybrid and Electric Vehicles will be launched in collaboration with all stakeholders.

The funding of 15, modern low floor and semi-low floor buses under JNNURM, besides adding to passenger comfort, has transformed the urban transport across India. The ongoing Metro projects of Bengaluru, Kolkata and Chennai will be provided financial assistance for speedy implementation. Investment in fertilizer sector is capital intensive and is considered high risk. It is proposed to include capital investment in fertiliser production as an infrastructure sub-sector.

Exports The Task Force on Transactions Cost set up by the Department of Commerce to identify and suggest ways to achieve improvement in efficiency of our export processes, has completed its work. Twenty one suggestions made by the Task Force have already been implemented. Action on remaining two will be taken in next few months. The Budget had some good news for those whose only source of income is a salary. From June , there'll be no need to file those complicated tax returns.

The government will be issuing a notification exempting 'classes of persons' from the requirement of furnishing income tax returns, said the Finance Minister.

Salaried taxpayers who do not have other sources of income and whose incomes are subject to Tax Deduction at Source TDS will be excluded from filing returns. The Budget had something to cheer for the industry, prompting the Sensex to rise points through the week.

Basic food and fuel and precious stones, gold and silver jewellery will be exempted. On higher classes, it will be 10 per cent flat.

Net revenue gain on account of indirect taxes is likely to be Rs 11, crore, including an additional Rs 4, crore on account of service tax changes. Budget announcements will have a direct impact on the cost of essential commodities.

With an estimated 60 per cent of subsidised fuel not reaching its targeted population, Finance Minister Pranab Mukherjee has said BPL families will get direct cash subsidy to buy fertilizers and cooking fuel at prevailing market prices from Mukherjee announced about 13 per cent reduction in subsidy of fuel, food and fertilisers for fiscal to Rs 1,34, crore from Rs 1,53, crore.

For the fiscal, the government estimated lower oil subsidy bill at Rs 23, crore, compared to Rs 38, crore in the current fiscal.