Union Budget 2009-10 simplified

Following are the highlights of the Budget:

India's Finance Minister Pranab Mukherjee announced a populist Budget on Monday with increased focus on infrastructure development and spending for farmers and the poor in its efforts to provide "inclusive development."

Following are the key features of the Budget:

Budget Estimates (B.E.) for 2009-10

* Total receipts seen at Rs.10,21,000 crore

* Revenue receipts seen at Rs.6,14,000 crore

* Capital receipts seen at Rs.4,06,000 crore

* Borrowings and other liabilities seen at Rs.4,01,000 crore

* Total expenditure seen at Rs.10,21,000 crore

* Plan expenditure seen at Rs.3,25,000 crore

* Non-plan expenditure seen at Rs.6,96,000 crore

* Fiscal deficit seen at Rs.4,01,000 crore, or 6.8 percent of GDP

* Revenue deficit seen at Rs.2,83,000 crore, or 4.8 percent of GDP

* 2008/09 GDP growth seen at 6.7 percent; government aims to return economy to high growth path of 9 percent/yr at the earliest.

Other Key Points

Infrastructure spending

- Allocations for highways, urban renewal to rise sharply

- IIFCL to evolve a takeout financing scheme in consultation with banks to facilitate incremental lending to infrastructure sector.

- IIFCL to refinance 60 percent of commercial bank loans for PPP projects in critical sectors over the next fifteen to eighteen months. IIFCL and Banks are now in a position to support projects involving total investment of Rs.1,00,000 crore.

- Allocation under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) stepped up by 87 percent to Rs.12,887 crore in B.E. 2009-10 over B.E. 2008-09.

- Allocation for housing and provision of basic amenities to urban poor enhanced to Rs.3973 crore in B.E. 2009-10. This includes provision for Rajiv Awas Yojana (RAY), a new scheme announced.

Highways and Railways

- Allocation to National Highways Authority of India (NHAI) for the National Highway Development Programme (NHDP) increased by 23 percent over B.E. 2008-09 in B.E. 2009-10 and allocation for Railways increased from Rs.10,800 crore in Interim B.E. 2009-10 to Rs.15,800 crore in B.E. 2009-10

Energy sector

- To develop long distance natural gas pipelines for a national grid; to set up panel to review domestic fuel prices

- Allocation under Accelerated Power Development and Reform Programme (APDRP) increased by 160 percent to Rs.2080 crore in B.E. 2009-10 over B.E. 2008-09.

- Blueprint to be developed for long distance gas pipelines leading to a National Gas Grid to facilitate transportation of gas across the length and breadth of the country.

Agriculture spending

- To provide additional Rs.1000 crore over interim budget for more irrigation; to offer direct subsidies to farmers

- Interest subvention scheme for short term crop loans up to Rs.3 lakh per farmer at the interest rate of 7 percent per annum to be continued. Additional subvention of 1 percent to be paid from this year, as incentive to those farmers who repay short term crop loans on schedule. Additional allocation of Rs.411 crore over Interim B.E. 2009-10 made for this.

- Time given to the farmers having more than two hectares of land to pay 75 percent of their overdues under Debt Waiver and Debt Relief Scheme extended from 30th June, 2009 to 31st December, 2009.

- Target for agriculture credit flow set at Rs.3,25,000 crore for the year 2009-10 (in 2008-09 agriculture credit flow was at Rs.2,87,000 crore.)

Government asset sales

- Aims to raise Rs.1120 crore from stake sales in PSUs, Rs.35,000 crore from 3G telecom spectrum auction

- While retaining at least 51 percent Government equity in Public Sector Undertakings, people's participation in disinvestment programs to be encouraged.

- Public Sector Enterprises such as banks and insurance companies to remain in public sector and will be given full support including capital infusion to grow and remain competitive

Financial sector

- The threshold for non-promoter public shareholding for all listed companies to be raised in a phased manner.

- Scheduled commercial banks allowed to set up off-site ATMs without prior approval subject to reporting.

- A sub-committee of State Level Bankers Committee (SLBC) to identify and formulate an action plan for providing banking facilities in under-banked/unbanked areas in the next three years. Rs.100 crore set aside as one-time grant in-aid to ensure provision of at least one center/Point of Sales (POS) for banking services in each of the unbanked blocks.

- Government has established Competition Commission of India, an autonomous regulatory body. An Appellate body headed by a retired judge of Supreme Court also constituted.

Export sector

- Adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 percent to badly hit sectors extended up to March 2010.

- Allocation for Market Development Assistance Scheme enhanced to Rs.124 crore in B.E. 2009-10.

- Interest subvention of 2 percent on pre-shipment credit for seven employment oriented export sectors extended beyond the current deadline of September 30, 2009 to March 31, 2010.

- To facilitate flow of credit at reasonable rates, Rs.4000 crore provided as special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank of India (SIDBI). This will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 percent of incremental lending to MSEs during the current financial year.

- Stimulus package for print media comprising waiver of 15 percent agency commission on DAVP advertisements and 10 percent increase in DAVP rates to be paid as a special relief subject to documentary proof of loss of revenue in nongovernmental advertisements, extended from 30th June, 2009 to 31st December, 2009.

National defence and security

- Outlay for Defence up from Rs.1,05,600 crore in B.E. 2008-09 to Rs.1,41,703 crore in B.E. 2009-10.

- Additional amount of Rs.430 crore provided over Interim B.E. 2009-10 to modernize police machinery in the States.

- Additional amount of Rs.2284 crore proposed over Interim B.E. 2009-10 for construction of fences, roads, flood lights on the international borders.

Education

- Provision for the scheme 'Mission in Education through ICT' substantially increased to Rs.900 crore and the provision for setting up and up-gradation of Polytechnics under the Skill Development Mission enhanced to Rs.495 crore.

- Rs.827 crore allocated for opening one Central University in each uncovered State.

- Rs.2113 crore allocated for IITs and NITs which includes a provision of Rs.450 crore for new IITs and NITs.

- The overall Plan budget for higher education is to be increased by Rs.2000 crore over Interim B.E. 2009-10.

- National Mission for Female Literacy to be launched with focus on minorities, SC, ST and other marginalized groups with the aim to reduce level of female illiteracy by half in three years.

- To enable students from economically weaker sections to access higher education, a scheme to provide full interest subsidy during the period of moratorium introduced to cover loans taken from scheduled banks to pursue any of the approved courses of study in technical and professional streams from recognized institutions in India.

Health

- Allocation under National Rural Health Mission (NRHM) increased by Rs.2057 crore over Interim B.E. 2009-10 of Rs.12,070 crore.

- All BPL families to be covered under Rashtriya Swasthya Bima Yojana (RSBY).

- Allocation under RSBY increased by 40 percent over previous allocation to Rs.350 crore in B.E. 2009-10.

National Food Security Act

- National Food Security Act to be brought in to ensure entitlement of 25 kilo of rice or wheat per month at Rs.3 per kilo to every family living below the poverty line in rural or urban areas. Food Security Bill to be put on the website of the Department of Food and Public Distribution for public debate.

- Allocation for Bharat Nirman increased by 45 percent in 2009-10 over B.E. 2008-09. Allocations under Pradhan Mantri Gram Sadak Yojana (PMGSY) increased by 59 percent over B.E. 2008-09 to Rs.12,000 crore in B.E. 2009-10.

- Under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), allocation increased by 27 percent to Rs.7000 crore.

- Allocation under Indira Awaas Yojana (IAY) increased by 63 percent to Rs.8800 crore in B.E. 2009-10. Allocation of Rs.2000 crore made for Rural Housing Fund (RHF) in National Housing Bank (NHB) to boost the resource base of NHB for refinance operations in rural housing sector.

National Rural Employment Guarantee Scheme (NREGS)

- Allocation under NREGS increased by 144 percent to Rs.39,100 crore in B.E. 2009-10 over B.E. 2008-09.

- To increase productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources, rural roads initiated. In the first stage 115 pilot districts selected for convergence.