BUDGET HIGHLIGHTS

• GDP growth for FY06 likely to be 8.1% with the manufacturing sector at 9.4% ; agricultural growth bounced back to 2.3%; inflation, as on February 11, 2006 was 4.02%; non-food credit growing by over 25%.
• Focus on Agriculture: output of food grains expected to be 209.3 MT, 5 MT more than the previous year.
• Promoting employment: National Rural Employment Guarantee Scheme launched; in the current year, Rs 11,700 crore to be spent to create rural employment.
• Enhancing Investment: Investment rate increased from 25.3% in 2002-03 to 30.1% in 2004-05.
• BHARAT NIRMAN: In the first year of implementation, 2005-06: Rs 944.18 crore released so far as grant under AIBP, target of 600,000 hectares of irrigation potential expected to be created this year; against target of 56,270 habitations, 47,546 habitations covered until January, 2006.
• Allocation for eight flagship programmes to increase by 43.2% from Rs.34,927 crore in 2005-06 to Rs.50,015 crore.
• Sarva Siksha Abhiyan: 93% of children in age group 6-14 years are in school, number of children not in school has come down to about one crore; outlay to increase from Rs 7,156 crore to Rs 10,041 crore in 2006-07; 500,000 additional class rooms to be constructed and 150,000 more teachers to be appointed; Rs 8,746 crore to be transferred to the Prarambhik Siksha Kosh from revenues through education cess.
• National Rural Employment Guarantee Scheme: allocation of Rs 14,300 crore for rural employment in 2006-07 with Rs 11,300 crore under NREG Act and Rs 3000 crore under SGRY, more funds to be provided according to need.
• Government to provide equity support of Rs 16,901 crore and loans of Rs 2,789 crore to Central PSEs (including Railways); infusion of Rs 1,180 crore in cash and non-cash sacrifices of Rs 2,566 crore in last two years to restructure ten PSEs, including Indian Telephone Industries Limited and Heavy Engineering Corporation Limited; to develop India as a hub for gems and jewellery, an expert body to be constituted.
• Micro Finance: 801,000 SHGs credit-linked in two years with credit of Rs 4,863 crore disbursed to these SHGs; another 385,000 SHGs to be credit- linked in 2006-07; NABARD to open a line of credit for financing farm production and investment activities through SHGs; Committee to be appointed on Financial Inclusion.
• Petroleum, Chemicals and Petro-chemicals: a Task Force setup to facilitate development of large PC&P Investment Regions; three such Investment Regions expected to be developed in 2006-07.
• Tourism: development of 15 tourist destinations and circuits to be taken up; 50 villages with core competency in handicrafts, handlooms and culture, close to existing destinations and circuits, to be identified and developed; 4 new institutes of hotel management to be established in Chhattisgarh, Haryana, Jharkhand and Uttaranchal; Plan allocation increased from Rs.786 crore to Rs.830 crore.
• Telecommunication: to reach 250 million connections by December, 2007, provision of Rs 1,500 crore for Universal Services Obligation Fund in 2006-07; more than 50 million rural connections to be rolled out in three years.
• Power: five ultra mega power projects of 4,000 MW each to be awarded before December 31, 2006; to create an enabling and empowered framework to carry out reforms an Empowered Committee of Chief Ministers and Power Ministers to be setup
• Petroleum: under NELP VI., 55 blocks and area of 355,000 sq kms offered; investment of Rs.22,000 crore expected in the refinery sector, in the next few years.
• Banking, Insurance and Pensions: net capital support to banking sector standing at Rs 22,808 crore, to be restructured to facilitate increased access of banks to additional resources for lending to the productive sectors; Bill on insurance to be introduced in 2006-07.
• Capital Market: limit on FII investment in Government securities to be increased from $ 1.75 billion to $ 2 billion and the limit on FII investment in corporate debt from $ 0.5 billion to $ 1.5 billion; ceiling on aggregate investment by mutual funds in overseas instruments to be raised from $ 1 billion to $ 2 billion with removal of requirement of 10% reciprocal share holding; limited number of qualified Indian mutual funds to be allowed to invest, cumulatively up to $ 1 billion, in overseas exchange traded funds; an investor protection fund to be setup under the aegis of SEBI
• Twelfth Finance Commission: Rs 94,402 crore to be released as States