Allocation for defence up at Rs 77,000 crore

NUTS & BOLTS

The government proposes to increase the allocation for defence to Rs 77,000 crore (against Rs 65,300 crore in Budget estimate 2003-04), which includes an allocation for capital expenditure of Rs 33,483 crore (against Rs.20,953 crore in Budget estimate 2003-04).

Antyodaya Anna Yojana extended
Antyodaya Anna Yojana to be extended to cover 20 million families up from 15 million families. These families will be provided with 35 kg of foodgrains per family per month at a highly subsidised price of Rs 2 per kg for wheat and Rs 3 per kg for rice.

The scheme will receive a subsidy of nearly Rs 3,500 crore. Provision for this level of expenditure has been included in the allocation for food subsidy of Rs 25,800 crore.

New food-for-work programme
Pending the National Employment Guarantee Act, which will guarantee 100 days of employment in a year to one able-bodied person in every poor household, the new Food for Work programme will be launched in 150 districts classified as the most backward and identified as areas in immediate need of such a programme. There will be special emphasis on the scheduled castes and tribes.

Allocation for minorities
The allocation for programmes for the Scheduled Castes increased by Rs 1,137 crore and for the Scheduled Tribes by Rs 1,087 crore. There is special emphasis on development for Minorities.

An additional allocation of Rs 50 crore is to be made for the National Minorities Development and Finance Corporation.

Self-help groups
The government has set an indicative target of credit linking 5.85 lakh self help groups during the period of up to March 31, 2007. The target has been set for NABARD, SIDBI, banks and other agencies.

Pilot project on food stamps
The government plans to introduce a pilot scheme for distributing food stamps, instead of distributing food through fair price shops, in two or three contiguous districts in a selected state.

Every eligible family will be entitled to collect its monthly quota of food stamps from a designated distribution centre, and such stamps could then be used to buy foodgrains from any food shop.

Redesigning universal health insurance
The government proposes to redesign the Universal Health Insurance Scheme and make it exclusive for people and families below the poverty line. The revised premium will be Rs 165 for individuals, Rs 248 for a family of five and Rs 330 for a family of seven, without any reduction in benefits.

To offset the reduction in premium, the finance minister proposes to enhance the premium subsidy from Rs 100 at present to Rs 200 for an individual, Rs 300 for a family of five and Rs 700 for a family of seven. The cost to the exchequer will be Rs 40 crore for a full year. If the money is fully spent, the number insured will rise to about 10 lakh.

Gender budgeting by 2005-06
Gender budgeting will start from 2005.The Budget data is to be presented in a manner that the gender sensitivities of the budgetary allocations are clearly highlighted.

An expert group on "Classification System of Government Transactions" submitted its report on July 6, 2004. It has recommended appropriate systems for data collection and representation in the Budget. The group has also recommended the introduction of periodic benefit-incidence analysis.

Special package for Bihar
The state will be assisted through the Rashtriya Sam Vikas Yojana and a provision of Rs 3,225 crore has been made for the present and, if necessary, this sum will be augmented.

The money will be used to complete pending projects, including projects in power, roads, drainage and rehabilitation of displaced persons.

Package for the Northeast
All ministries and departments have been mandated to allocate at least 10 per cent of their Plan budget for schemes and programmes in the northeastern region.

This amounts to an allocation of Rs 5,823 crore to be spent in the region. The amount remaining unspent from this 10 per cent allocation is transferred to a non-lapsable Central pool of resources for development of the northeastern region.

In the current year, Rs 650 crore have been provided from the Central pool of resources for specific projects and schemes in this region, up from Rs 550 crore in 2003-04.

Assistance for Jammu & Kashmir
The government will provide special assistance to Jammu & Kashmir to have a reasonable Plan size. It will also provide financial support for the long pending Baglihar project.

The government also agrees to provide a grant of Rs 300 crore to the state to ensure the smooth switchover from the current overdraft arrangement with the Bank of Jammu & Kashmir to the Ways & Means scheme of the Reserve Bank of India.

Backward States Grant Commission
A Backward States Grant Commission to be used for creating productive assets in such states. It also envisages that all non-statutory resource transfers from the Central government will be weighed in favour of poor and backward states, but with performance parameters as well.

Funds for backward states
The Backward States Grant Fund will have a corpus of Rs 25,000 crore to be provided over a period of five years. While the existing Backward Districts Initiative Scheme with an annual outlay of about Rs 1,800 crore will be merged into this fund, the balance amount required for the annual contribution of Rs 5,000 crore will be earmarked from out of the total Central support to the Plan.

It is expected that this will enable taking up social and physical infrastructure programmes in the poorest and most backward districts in the country within a given time frame. The Fund will become operational from the financial year 2005-06.

Technical committee on VAT
The government has offered setting up of a technical experts committee to help the states understand and implement VAT. The committee will work with the states closely and help them move steadily towards implementation of VAT or value-added tax.

There was a broad consensus among states to implement VAT at the meeting of the Empowerment Committee of State Finance ministers. April 1 has been set as the date for implementation.