Posted by: Prem Piyush | March 18, 2005

India budget 2005-2006

In continuation to my March 10, 2005 post; “how many points out of 100 would you give to Budget 2005? ”

Does this budget justify with the agriculture and farmer of India?

  • The budget have provision for the irrigational facility to additional 1 crore hectares of land over the period of 5 years giving employment to 1 crore people at the rate 1 person per hectare.
  • Micro – irrigation :About 1.2 million hectares have been covered under micro-irrigation comprising drip and sprinkler irrigation, on a large scale and the by the end of Tenth Plan the coverage is planned to 3 million hectares and by the end of eleventh plan 14 million hectares . The allocation of Rs. 400 crore is provided for promoting the micro-irrigation.
  • Next comes the financing the farmers. The farmers will be disbursed 108,500 crore current year as agricultural loans. The govt. wishes to increase this rate by 30 %.
  • Subsidy on fertilizer Rs. 16,254 crore.
  • Farm Insurance scheme to exists in a farmer friendly manner.
  • Being agriculture is a state subject and center acting as catalyst to support the states.
  • National Agriculture Mission: Allocation of Rs. 630 crore for research, production, post-harvest management, processing and marketing, under one umbrella in an integrated manner.
  • Government proposed new scheme of Development/Strengthening of Agricultural Marketing Infrastructure, grading and standardization with a primary allocation of Rs.42 crore. This scheme to attract the private and cooperative sector will be assisted through credit linked, back-ended subsidy.
  • The scheme is propsosed to implement the scheme through the NABARD, NCDC in those states who amend their Agricultural Produce Marketing Committee (APMC) Acts.

Is this budget capable to check the increasing price?

Government is mute.

Does the problem of unemployment and poverty is addressed in this budget?

Poverty as described by the PC is described not only by income poverty but also by other indicators like illiteracy, disease, infant mortality, malnutrition, absence of skills and unemployment. His point of view is agreeable.

  • Education allotment Rs. 18,337 crore
  • Rural allotment Rs. 18,334 crore
  • Health & family welfare 10,280 crore
  • Upgrading of ITI’s over the next 5 years.
  • Allocation of Rs.11,000 crore for National Rural Employment Guarantee Scheme.
  • Government intends to continue with its effort to turn the focus of commercial banks, regional rural banks (RRBs) and cooperative banks towards providing credit, especially production credit, to rural households and farm households. Particularly in agricultural credit, innovations are possible. Reserve Bank of India (RBI) to examine the issue of allowing banks to adopt the agency model, by using the infrastructure of civil society organizations, rural kiosks and village knowledge centers, to provide credit support to rural and farm sectors.
  • There is Sarva Shiksha Abhiyan with a non-lapsable allocation of Rs.7,156 crore.
  • Mid Day Meal Scheme for the school going children up to class V with allocation of Rs. 3,010 crore.
  • There is proposal by the government to provide the pre-examination coaching in the private institutes for the students belonging from the minority community.
  • 47 percent children are underweight in age group 0-3 hence they were to be given additional supplement diet from the ICDS scheme at the increased cost of 3,142 crores. And the implementation of the scheme using the Anganwadi centres will be done thorough the 6,49,000 centres and there is proposal of creating 1,88,168 centres .
  • All drinking water schemes has been brought under the Rajiv Gandhi National DrinkingWater Mission . The water quality of the 2.16 lakh habitations of Andhra Pradesh , Gujrat, Karnataka, Rajasthan,W.B. and some other states the outlay for the mission have been increase to 4500 crores.
  • Total Sanitation Scheme is extended to all districts and the allocation of Rs. 630 crore is made.

  • The Rural Infrastructure Development Fund for providing infrastructure to the poor of rural India and slums is provided a corpus of 8,000 crores.

Some economic parameters :

Since last two financial years as the trend is continuing the fiscal deficit will lead to slippage further and government’s expectation of 4.3% can be met. Lower the fiscal deficit better the economy.

GDP * (GDP: Gross Domestic Product is the ‘All ultimate products + services, excluding the income from foreign)
Taxes seems to a good contributor in GDP because of the positive growth in industries’ outcome, PSU’s higher dividend and significant service taxes and several other factors.

The GDP growth which is is positive can be estimate same trend and based upon the market, industry and services and well as monsoon it can reach around 7.5 % .

Now coming to critical analysis :

Govt. promises a significant increase in the funds in welfare programs, but from where the government will be able to get the money for (it will only absorb $2 billion out of the reserve of $133 billion of forex) .But how government can be foresighted in expending the liability which is to be returned back with interest to the investors.

The implementation is again a challenge; there are many plans which does not reach the end hands. The conceived idea of Panchayati Raj Department and disbursement of funds thorough the local bodies is not practical. Worth to mention here that two of my meritorious batch mates devoted to start a NGO “Sajhiya Samang” to help the remote villagers to uplift their lives at Saharsa in Bihar and they are facing a lot of problem to get the minimum amount because of the authorities’ high handedness and they are getting hopeless.

My marks shall be 65/100 for the present budget that too if implemented.


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