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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INVESTMENT

All indicators point to an accelerating rate of investment in the economy. For example, gross domestic capital formation (GDCF) in 2005-06 grew by 23.7 per cent over the previous year to Rs 11,47,254 crore. I believe that this trend continues in 2006-07. In April-January, 2006-07, foreign direct investment amounted to US$12.5 billion and outpaced portfolio investment which was US$6.8 billion.

Central Public Sector Enterprises (CPSEs) will, through internal and extra budgetary resources, invest Rs 165,053 crore in 2007-08. Government will provide equity support of Rs 16,361 crore and loans of Rs 2,970 crore to CPSEs.

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Further, in the current year, we have restructured eight CPSEs with a cash infusion of Rs.1,590 crore and non-cash sacrifices of Rs 1,612 crore.

INFRASTRUCTURE

Power

Electricity generation has recorded a growth rate of 7.5 per cent in April-December this year. However, as we complete the Tenth Plan, we would have added only 23,163 MW of additional capacity in the five year period including 16,339 MW added in the three years beginning 2004-05. Hence, it is imperative that we take new initiatives.

The Ministry of Power has awarded two Ultra Mega Power Projects (UMPP) in Sasan and Mundra. Seven more UMPPs are under process and we are confident that at least two more will be awarded by July, 2007. Other initiatives taken by the Ministry of Power include facilitating setting up of merchant power plants by private developers and private participation in transmission projects.

Besides, the Accelerated Power Development and Reforms Project (APDRP) has reduced significantly Aggregate Technical and Commercial (ATC) losses in 213 towns. APDRP is being restructured to cover all district headquarters and towns with a population of more than 50,000. I propose to increase the budgetary support for APDRP from Rs 650 crore in 2006-07 to Rs 800 crore next year.

Rajiv Gandhi Grameen Vidyutikaran Yojana

Having regard to the pace of implementation under the Rajiv Gandhi Grameen Vidyutikaran Yojana and the annual target, I propose to increase the allocation from Rs 3,000 crore in 2006-07 to Rs 3,983 crore in 2007-08.

Coal

Following the announcement last year, 26 coal blocks with reserves of 8,581 million tonnes and four lignite blocks with reserves of 755 million tonnes have been allotted, up to December 2006, to Government companies and approved end users. The definition of specified end use will be enlarged to include underground coal gasification and coal liquefaction.

National Highways

Work on the Golden Quadrilateral is nearly complete and there is considerable progress in the North-South, East-West corridor project which is expected to be completed by 2009. NHDP-III, NHDP-V and NHDP-VI are in advanced stages of planning or implementation. So far, National Highways Authority of India (NHAI) has given Rs 2,072 crore as viability gap funding but has also received Rs 1,900 crore as negative grant. The private sector investment leveraged under NHDP is Rs 25,366 crore. Under the programme for the North Eastern Region (SARDP-NE), 450 kilometres have been awarded in 2006-07 and the balance will be awarded in 2007-08. I propose to increase the provision for the National Highway Development Programme (NHDP) from Rs 9,945 crore in 2006-07 to Rs 10,667 crore next year.

The road-cum-rail bridge at Munger, Bihar, over the Ganga, has been taken up as a national project. Likewise, the road-cum-rail bridge at Bogibeel, Assam, over the Brahmaputra, will be taken up as a national project.