Budget speech 2007-08: Full text

FM'S SPEECH: Chidambaram said that there were many pluses and a few minuses, both of which he dealt with in his speech candidly.

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Mumbai as a Financial Centre

The High Powered Expert Committee to make Mumbai a regional financial centre has submitted its report recently. I intend to place the report in the public domain and obtain feedback. It is my hope that we would be able to build a consensus on the key recommendations of the Committee, promote a world class financial centre in Mumbai, and realise the objective of making 'financial services' the next growth engine for India.

Vocational Education Mission

To sustain a high level of economic growth, it is essential to have a reservoir of skilled and trained manpower. Shortages have already emerged in a number of sectors. Moreover, we can take advantage of the demographic dividend thrown up by an increase in the working age population only if our young men and women have the required skills. The Prime Minister spoke of a Vocational Education Mission in his Independence Day address in 2006. A taskforce in the Planning Commission is chalking out strategies for vocational education programmes. Alternate models may be adopted, but the approach will be based on public-private partnership. I propose to make an initial provision of Rs.50 crore for beginning work on this mission.

Upgradation of ITIs

Honourable Members will recall that Government had taken up a programme for upgradation of 500 ITIs over five years beginning 2005. Revised courses in the first lot of 100 upgraded ITIs were started in August 2005 and in the second lot of 100 upgraded ITIs in August 2006. I expect that another 300 ITIs will be covered by August 2009. That would still leave 1,396 Government ITIs.

104. I propose that the 1,396 ITIs be upgraded into centres of excellence in specific trades and skills under public-private partnership. Under the proposed scheme, the State Government, as the owner of the ITI, will continue to regulate admissions and fees; the new management will be given academic and financial autonomy; and the Central Government will provide financial assistance by way of seed money. ITIs will be encouraged to start a second shift.

Once a tripartite MoU is signed among the three stakeholders, I propose to grant an interest free loan up to Rs.2.5 crore to each ITI for upgradation and revision of courses. I seek the cooperation of State Governments in upgrading at least 300 ITIs every year, beginning 2007-08, under the PPP mode. I have kept aside Rs.750 crore for this purpose.

Employment for the Physically Challenged

Among the disadvantaged sections of the society are physically challenged persons. They face difficulties in obtaining regular employment. In order to incentivise employers in the organised sector to provide regular employment, I propose a scheme whereunder Government will reward the employer once the physically challenged employee is regularised and is enrolled under the Employees Provident Fund (EPF) and the Employees State Insurance (ESI). Under the scheme, Government will reimburse the employer's contribution to the EPF and ESI for the first three years. Government is ready to support the creation of about 100,000 jobs every year for physically challenged persons with a salary limit of Rs 25,000 per month. I estimate the cost to Government at Rs 150 crore per annum rising to Rs 450 crore per annum when the scheme is fully rolled out. I have therefore earmarked Rs 1,800 crore.

Debt Management Office

World over, debt management is distinct from monetary management. The establishment of a Debt Management Office (DMO) in the Government has been advocated for quite some time. The fiscal consolidation achieved so far has encouraged us to take the first step. Accordingly, I propose to set up an autonomous DMO and, in the first phase, a Middle Office will be set up to facilitate the transition to a full-fledged DMO.

Development Cooperation

In keeping with India's growing stature in international affairs, we must willingly assume greater responsibility in promoting development in other developing countries. At present, India extends development cooperation through a number of Ministries and agencies and the total sum is about US$ 1 billion per annum. It is felt that all activities relating to development cooperation should be brought under one umbrella. Accordingly, Government proposes to establish the India International Development Cooperation Agency (IIDCA). The Ministries of External Affairs, Finance and Commerce and other stakeholders will be represented on IIDCA.