Budget speech 2006-07: Full text

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Kasturba Gandhi Balika Vidyalaya Scheme

38. The initial results of the Kasturba Gandhi Balika Vidyalaya Scheme launched in 2004 are encouraging. 1,000 new residential schools for girls from SC, ST, OBC and minority communities will be opened in 2006-07. I have provided Rs.128 crore, and I have agreed to provide an additional sum of Rs.172 crore during the year. I propose to provide a further incentive to the girl child who passes the VIII Standard Examination and enrols in a secondary school. A sum of Rs.3,000 will be deposited in her name, and she would be entitled to withdraw it on reaching 18 years of age.

39. Government has shifted the emphasis from sheer ‘quantity’ to the ‘quality’ of the outcome of the various social sector programmes. To ensure value for public expenditure, an Outcome Budget was presented on August 25, 2005. Government intends to present a Performance Budget on the first Outcome Budget before the end of the Budget Session. The Outcome Budget for 2006-07 will be placed before this House by March 17, 2006. This new approach underscores our resolve to ensure that the intended services in the right quantity and quality are delivered to the aam admi.

V INVESTMENT

40. There is an investment boom in the country and it is necessary to maintain the confidence of investors. It appears that India is catching up with the high investment rates of East Asia and China. Honourable Members will notice presently that, in every sector, the attempt is to promote more investment.

41. Government is committed to a strong and effective public sector. Public Sector Enterprises (PSEs) have, through internal and extra-budgetary resources, investment plans amounting to Rs.122,757 crore in 2006-07. I am happy to announce that Government will provide equity support of Rs.16,901 crore and loans of Rs.2,789 crore to Central PSEs (including Railways). Besides, I wish to point out that in the two years of this Government, we have infused Rs.1,180 crore in cash and made non-cash sacrifices of Rs.2,566 crore to restructure ten PSEs, including Indian Telephone Industries Limited and Heavy Engineering Corporation Limited.

42. We believe that there is considerable scope for developing India as a hub for the gems and jewellery industry. I, therefore, propose to constitute an expert body that will look into the potential of this sector and the prevalent taxation practices in India and abroad, and make its recommendations in this behalf. I am sure this announcement will be welcomed by Non Resident Indians who are looking to India as the place for future expansion and growth.

43. Foreign Direct Investment (FDI) continues to play an important role. We have the opportunity to make India a manufacturing hub for textiles, automobiles, steel, metals, petroleum products etc. for the world market. In calendar 2005, up to November, 2005, FDI is estimated at $ 4 billion, without counting reinvested earnings and other capital. I am confident that recent policy changes will attract more foreign investment into the country, especially in infrastructure.

VI AGRICULTURE

44. Let me now turn to the productive sectors of the economy. As always, our Government’s focus is on agriculture. Assured irrigation, credit, diversification and creating a market for agricultural products are the thrust areas.

Irrigation

45. Out of an outlay of Rs.4,500 crore under AIBP in 2005-06, the grant component is Rs.1,680 crore. The States are expected to spend about Rs.2,520 crore from their resources, and 25 projects are expected to be completed before the end of the year. The outlay for 2006-07 has been increased to Rs.7,121 crore, and the Central Government will support the programme through a grant of Rs.2,350 crore. The Ministry of Water Resources will revamp the Command Area Development Programme to allow participatory irrigation management through water users’ associations.

46. The programme for repair, renovation and restoration of water bodies is being implemented through pilot projects in 23 districts in 13 States. The design of the programme has been finalized in consultation with the States. 20,000 water bodies with a command area of 1.47 million hectares have been identified in the first phase. The estimated cost is Rs.4,481 crore. The funding pattern (Centre, States and external assistance) has been finalized, and I intend to seek, and receive, funds from multi-lateral agencies. The participating State Government will be requested to sign a memorandum of understanding and the water bodies in that State will be taken up for repair, renovation and restoration in 2006-07.