Union Budget 2010-11

India's finance minister Pranab Mukherjee unveiled the Union Budget 201011 on Friday, February 26, [Link] is not just a statement of
Government accounts, but it reflects the Governments vision and indicates
the policy of the government, which decides the path of the economy for
the [Link] this post the budget has been discussed at a length. The
author tried to clear all the fundamentals of the budget, which every person
should know and understand. The author has started this discussion from the
constitutional position of the budget to all aspects and tries to cover
almost all topics of the budget with special emphasis on development
programmes as well as covering almost all sectors of the Economy of India.
While going through the speech and other budget documents:
1. We can analyze that the Government wishes to bring the economy back to the
growth rate of 9% on which it was a few years back.
2. We also come to know that Government has tried to mold its fiscal policy in
tune with the recommendations of the 13th Finance Commission.
3. We can also see that a large chunk of expenditure is going to the Social Sector
of our economy.
4. The budget also introduced some new schemes, Budget tried for fiscal
consolidation and Govt. is coming back to the disinvestment agenda.

We can hear the voices of opposition regarding a cut motion they wish to
bring, after the base excise tax on the petrol and diesel was raised.
Millions of words have been uttered in the media, and millions will more be
uttered, but here, we have tried to bring out all those things which might
be helpful for you to understand the basics as well as note & learn those
points which may be useful for all examinations. Each Post has been linked
to another so, that it does not confuse you while going through these pages.

Constitutional Position of the Union Budget.

Article 266 of the Indian Constitution provides about creation of the Consolidated
Fund of India. In simple language this "Consolidated Fund of India" has in whole
or part of the net proceeds of certain taxes and duties to States, all revenues
received by the Government of India, all loans raised by that Government by the
issue of treasury bills, loans or ways and means advances and all moneys received
by that Government in repayment of loans.
This means that all revenues received by the government, loans raised by it and

receipts from the recoveries of loans granted by it make the Consolidated Fund of
India. All expenditures of the Govt. is incurred from the Consolidated Fund of
India, but no amount can be withdrawn from the fund without the authorization from
the Parliament.
Government of India gets this authorization from the parliament of India through
Budget
At the beginning of every financial year, the President of India causes to be laid a
statement of the estimated receipts and expenditure of the Government of India for
that year before both the houses of the parliament. It is called Annual Financial
Statement which is commonly known as Budget.

Budget 2010-11: Components of Union Budget

In common meaning, all money that has to be charged for various expenditures has
to be presented by the finance minister in the form of "Annual Financial
Statement" which consists of
1. What are the expenditures for the coming year
2. What are the ways and means to raise the revenues,
3. Analysis of the performance of the closing year
4. Explanation of the economic policy and agenda of the government and prospects of
revenue.

The following are the components of Budget as provided in the Indian Constitution:
Annual Financial Statement as per article 112 (1) of the Indian Constitution:
In constitution of India Union Budget has been described in Part V Chapter II
Parliament. Article 112 (1) of the constitution says that The President shall in
respect of every financial year cause to be laid before both the Houses of Parliament
a statement of the estimated receipts and expenditure of the Government of India
for that year, in this Part referred to as the "annual financial statement". It consists
of all expenditures which have to be charged from consolidated fund of India.
As mandated in the Article 112 of the constitution the first document which is
presented to both the houses of the parliament is Annual Financial statement It
consist of :
1. Statement I - Consolidated Fund of India : which Consists of Revenue Account Receipts & Disbursements, as well as capital account Receipts and Disbursements.
2. Statement IA - Disbursements 'Charged' on the Consolidated Fund of India
3. Statement II - Contingency Fund of India - Receipts and Disbursements
4. Statement III - Public Account of India
5. Receipts & Expenditure of Union Territories without Legislature

Demand for Grants as per Article 113 of the constitution: In simple meaning it
consists of total expenditures required for a particular ministry. Demands for
Grants and the Appropriations for a particular year are presented to Parliament along
with the Annual Financial Statement are contained in respect of all the Ministries/
Departments.

The estimates of the expenditures as in the Budget are devided into two
heads:
1. Votable: Votable expenditures are submitted in the form of Demand for Grants. In
simple meaning the house has the power to assent to or refuse asent to any demand or
make any amendments. For example expenditure of agriculture Ministry or any other
ministrys expenditures.
2. Nonvotable: These are those sums which have to be charged from consolidated fund of
India as per described by the constitution. They are not submitted to the parliament to
vote. They include emoluments and allowances of president, chairman and deputy
chairman of the Rajya sabha, Speaker and Deputy speaker of the Lok Sabha, Judges of
the Supreme courts and High courts, Interest payments on the money which has been
borrowed by the Government of India.

Appropriation Bill:
Now, we know that no money can be withdrawn from the consolidated fund
of India without enactment of a law by the parliament. Once the Demand for
grants are ready under article 113 , a bill which incorporates all the demands for
grants voted by lok Sabha and all the expenditures charged on Consolidated fund of
india is introduced in Lok Sabha which is called Appropriation Bill .

Article 114 of the constitution provides for Appropriation Bill. Rajya Sabha
has no power to amend or reject it but can advise or give its concurrence. It is
passed by the Lok Sabha and then presented to the President for assent.

Finance Bill: As per article 110 of the Indian constitution, all the financial
proposals of the government for the particular year are incorporated in the annual
Finance Bill. A Finance Bill comprises tax proposals of the government. It is also
passed in a manner as a Money bill is passed.

Budget 2010-11: Budget Procedure

We all know that in our country, Budget consists of Railway Budget and General
Budget which is called Union Budget. Before 1924, there was a single Budget in
India which was more or less a railway Budget only as Railways were a large
economic entity our country and much of the interest of the British in our country
was confined to Railways, prior to our independence.
A separate budget for the railways in India was a sequel to the Acworth
Committee Report, which recommended the separation of railway finances from
the country's general finances, and this arrangement has been in place since
1924.
Since last 8 decades the same arrangement is in place. Railway Budget is presented
in Third week of February every year (in most cases) and after that Economic Survey
& General Budget are presented. Economic Survey started being presented almost a
decade after we got independence. General Economic Survey is also presented to the
parliament of India.

The Budget speech is the presentation of the Finance Minister in the Parliament. A copy
of Budget is laid in the Rajya Sabha.

After presentation of the Budget, all members are given due time to go through the text
of the budget and after that discussion is hold on the budget.

Prior to 1994-95, the discussion on Budget was in two parts one called general
discussion and another called detailed discussion, which was followed by a voting on
demands for grants.
1994-95 onwards, Our parliament has decided to constitute the committees
to consider the demands for grants for various ministries.

Now after a few days of presentation of the budget, there is a general discussion on the
economic and fiscal policy of the government and parliament takes a break.

In between the Speaker refers all the Demand for Grants for various ministries to
the respective parliamentary committees which are 17 in total.

These committees closely scrutinize the Demand for Grants.

Note: This procedure is efficient and saves time of the parliament as full house
discussion and going through legthy details and technicalities is a time consuming
process. However please note that committees are given sufficient time.

After 4 weeks, the parliament reassembles and reports of these committees are
presented to the Parliament.

It follows by a discussion.

During discussion, the budget is open to members to disapprove any policy or alter the
focus of a ministry on a particular goal or grievances. For this subsidiary movements are
run which are called cut motions.

Finally the Budget is passed and it becomes a law.

Budget 2010-11: Size of Our Economy

Central Statistical Organization (CSO) estimates the GDP of our country.

At current market Price, GDP of India in 2009-10 was Rs. 61,64,178 Crore as per the
advanced estimated released by CSO.

GDP for Budget Estimates 2010-2011 has been projected at Rs.69,34,700 crore
assuming 12.5% growth over the advance estimates of 2009-2010.

GDP at (factor cost 2004-05 prices) for 2009-10 was Rs. 4453064 Crores.

The GDP growth is 7.2% and It is the first challenge of our government to Bring the
country back on the track of 9% growth rate, on which it was a few years back.

Have a look on the following Graphic:

Union Budget 2010-11:From Where the Money will come?

Money comes as Revenue Receipts & Capital Receipts. Let's discuss them :

Revenue Receipts:

Receipts which come by the way of direct and indirect taxes,

interest, dividends and profits from investments of the government, fees

and other receipts for services rendered by the government are called
revenue receipts.

It means that taxes of all kinds weather direct or indirect, customs or excise, service tax
or taxes on union territories are revenue receipts. Non-tax revenue of the government
such as interests it receives, dividends and profits on its various companies, external
grants and assistance, and receipts from the Union territories are also revenue receipts.

Capital Receipts:

Receipts which come by the way of loans rose from the market,

borrowings from RBI, External assistance from Foreign Governments,

Recoveries of Loans and Advances are capital receipts.

Capital receipts also include the money which the government shall get from
disinvestment of public sector companies.
Note: This year we can see that Government has kept a target of Rs. 40000 crore
under miscellaneous capital receipts heading, it gives an indication that Govt. is
coming back on its disinvestment agenda. We have discussed it later.
The debt receipts are market loans, external assistances, loans, securities, state
provident funds etc.

Total Receipts for 2010-11:

Total Receipts of the central Government as per the

Budget Estimates of 2010-11 are Rs. 11, 08,749 Crores. So the entire budget figures
revolve around this figure of more than Eleven Lakh Crores of Rupees.

61% of this amount will come from Revenue Receipts and 39% from Capital
Receipts.

The Government in 2010-11 will collect Rs. 746,651 Crores Through all kinds of
Taxes weather direct or indirect.

Out of this money Rs. 3560 crores will be transferred to National Calamity contingency
Fund / or NDRF.

Rs. 208997 crores will be share of the state governments.

The remaining Rs. 534094 Crores will be centres Net Tax Revenue.

Apart from this Government will get Rs. 148118 Crore Rupees from non-tax revenue,
such as interest receipts, Dividends and profits External grants, and other nontax
revenues plus receipts of Union Territories.

This Total amount comes to be Rs. 682212 crore which is Central Governments
Total Revenue receipt.

In the year 2010-11, the government projects to receive Rs. 426537 crores as Capital
Receipts including no debt receipts and debt receipts.

Figures at a Glance: The total Receipts are as follows:

Total Revenue Receipts = Rs. 682212 Crores

Total Capital Receipts = Rs. 426537

Total Budget Receipts= Rs. 11, 08,749

The following Graphic shows the Central Governments share in the Total Receipts
(after proportionally deducting the States share from the Total Tax Receipts and
fund transferred to National calamity Contingency Fund or NDRF (National Disaster
Response Force) for indication only) please click the image for better view

The following table represents the Figures of the 2010-11 Budget Estimates of the
Receipts of the Government:

2010-2011
Budget Estimates
Receipts
REVENUE RECEIPTS

1. Tax Revenue
746651
Gross Tax Revenue
301331
Corporation tax
120566
Income tax
8103
Other taxes and Duties*
115000
Customs
132000
Union Excise Duties
68000
Service Tax
1651
Taxes of the Union
Territories
3560
Less- NCCD transferred to the
National Calamity
Contingency
Fund/NDRF
208997
Less States' Share
534094
Centre's Net Tax Revenue
2. Non -Tax Revenue
19253
Interest Receipts
51309
Dividend and Profits
2060
External Grants
74571
Other Non-Tax Revenue
925
Receipts of Union Territories
148118
Total Non-Tax Revenue
682212
Total Revenue Receipts
3. CAPITAL RECEIPTS**
A. Non-debt Receipts
5129

1. Recoveries of Loans &

Advances@
40000
2. Miscellaneous Capital
receipts
45129
Total
B. Debt Receipts
345010
3. Market Loans
...
4. Short term borrowings
22464
5. External assistance (Net)
13256
6. Securities issued against
Small Savings
7000
7. State Provident Funds
(Net)
-6322
8. Other Receipts (Net)
381408
Total
426537
Total Capital Receipts (A+B)
...
4. DRAW-DOWN OF CASH
BALANCE
1108749
Total Receipts (1+2+3+4)

Budget 2010-11: Central Governments Expenditure

Now, after we understand from where the money will come, lets have a look on how
the money will be spent. The expenditures of the government are divided in two
broad categories:
1. Plan Expenditures: Plan expenditures is the outlay on schemes and programmes
formulated by various ministries of the government mainly under 5 year plans and other
development programmes. They are further subdivided into central plan, Central
assistance to states plan and Union Territory plan.
2. Non-Plan Expenditures:
The nonplan expenditures are those expenditures which are outside that incurred in
keeping with the plans formulated under the 5 year plans. It includes interest payments

on the money which we have borrowed from outside, expenditures on our internal and
external defense and security, subsidies, grants to state governments and Union
territories, Pensions, Assistance from national calamity funds, grants to foreign
governments, etc.

Plan expenditures and Non-plan expenditures may be on revenue account or on

capital account. The table which comes later in this post , we have taken from the
Budget Documents of 2010-11 shows all the details.
What are Contingency Funds?
There are many occasions when the government may have to meet urgent
unforeseen expenditures. A contingency fund is placed at the disposal of the
President to incur such expenditures. Parliamentary approval is required to withdraw
money from such funds.
What is Public Account of India?
Besides the normal receipts and expenditures of the govt. related to the
Consolidated Fund of India, there are certain other transactions also in regard with
which the government of India acts as a banker. This money is kept in Public
accounts of India. Please note parliamentary authority is not required for payments
from Public accounts.
Now please go through the following table:

The following Points should be noted before moving to next chapter:

1. Total expenditure of Rs. 11, 08,749 Crore will comprise of the Plan expenditure of Rs.
373,092 Crore and non-plan expenditure of Rs. 735,657 Crore.
2. Rs. 11, 08,749 Crore is 8.53% more than the last years revised estimates of Rs.
10,21,547 Crores.
3. The plan expenditure of this year involves roughly 15% increase while the nonplan
expenditure involves 6% increase from the revised estimates of 2009-10

After Understanding the Plan Expenditure and Nonplan expenditure, lets Move to
understand some more terms related to Budget.

Budget 2010-11 : Revenue Deficit

In the previous posts we had an insight into the Governments receipts and
expenditures. The following table which has been taken from the Budget Documents
of 2010-11 presents budget at a glance.

Revenue Deficit:
The above table shows that in 2010-10 Budget estimates of the government,

Revenue deficit is of Rs. 276412 crores which is 4% of the GDP.

What is Revenue Deficit?
Revenue deficit represents the difference between the total of revenue expenditure
(Both plan and nonplan) over the receipts on the revenue account.

In the above table it is evident that Govt. estimated the plan expenditure on revenue
account is Rs. 315125 Crores and Non plan expenditure on revenue account is Rs.
643599 Crore Rupees. This totals to Rs. 958724 Crores. In lieu of these expenditures,
Government of Indias receipts on revenue account is Rs. 682212 Crores. So there is a
difference of Rs. 276512 Crores.

Note: Revenue deficit is opposite to Revenue Surplus. In a condition of revenue

deficit, the amount of expenditure of the government (on various programmes) is
more than the amount of projected received revenue.
For example suppose I have Rs. 100 in my pocket. I project that I will spend Rs. 75
on a project and thus will make a revenue of Rs. 25. But in actual scene, my plan
translates into actual revenue of Rs. 90 and I spend Rs. 70 on that project. So, my
projected revenue fell short by Rs. 5 which I budgeted before spending. This is a
situation of revenue deficit.

What does the Revenue Deficit show?

Revenue deficit shows the excess of the government's total revenue expenditure
(largely on non-asset creating schemes, subsidies, salaries and pensions) over its tax
and non-tax revenues.

What does the Revenue Deficit Signify?

This difference signifies the hurdles and problems of the government in managing
the economy.
On one side, it is a duty of the government to spend on development programmes of
the country, but on the other side there is always a time lag between the spending
and in returns. Govt. can not charge the people first and then spend. Besides high
expenditures on Government programmes and subsidies dont provide any returns to
the government as such (this means tangible returns, of course there are intangible
returns of Govt. Expenditure).
Now lets discuss in some more detail:

The following Graphic shows Indias Revenue Deficit for last few years:

The above graphic shows that in 2009-10 the projected Revenue deficit was 4.8 %
which grew up to 5.3% in the revised estimated.

The 13th Finance Commission had recommended revenue deficits of 2.3 per cent
and 1.2 per cent of GDP for 2011-12 and 2012-13, respectively.

We can see that Finance Ministry has tried to fine tune its policy by bringing down the
revenue deficit to 4%.

However the finance ministry's medium-term fiscal policy statement indicates that the
revenue deficit for these years would come down to only 3.4 per cent and 2.7 per cent in
this period.

Definitely bringing down the revenue deficits to the level of the recommendations of
the 13th Finance Commission is a challenging task.

Budget 2010-11: Fiscal Deficit

Please have a look on the following table again:

In the above table the Fiscal deficit of the Government is Rs. 381408 Crores
which is 5.5% of the GDP worth.

What is Fiscal Deficit?

In simplest words, Fiscal deficit is the total resource gap or overall financing
requirements in the Governments fiscal operations. It also reflects total borrowings
by the government. The fiscal deficit is the excess of spending over nonborrowed receipts, financed through borrowing.
In the above table we can see that, the Government of India projects the total
expenditure of Rs. 11,08,749 Crores, however it projects to receive Rs.
682212 Crores from Tax and other revenue receipts, 5129 crores from the
recoveries of loans, and Rs. 40000 crore from Other Capital Receipts.

The fiscal deficit for this year is 5.5% of the GDP.

The 13th Finance commission had mandated a fiscal deficit of 5.7.

The 13th Finance Commission has also recommended a calibrated exit strategy from the
expansionary fiscal stance of last two years.

Now lets look at the trend of the Fiscal deficit:

In the above graphic, we can see that Fiscal defcit in last years budget was 6.8%
which was in revised estimates 6.7% . This year our finance minister projects the
Fiscal deficit at 5.5% of the GDP.

Now a question- How Fiscal deficit will be reduced?

There are two ways to reduce the fiscal deficit.

One is reducing spending and other is raising non-borrowed receipts. Main part of
non-borrowed receipts is tax receipts, so tax net should be widened. Dividend and
interest receipts, as well as loan repayments to the Centre are also non-borrowed
receipts. These also include things like revenues from auctioning off telecom
spectrum and disinvestment proceeds. All of them help the government in bringing

down the fiscal deficit.

Here is an important thing to note down. I have taken a bit of Info from the Budget
at a Glance table. Please look at the pink highlighted row:

In the above table we, se that in 2009-10 Budget estimates the Other Receipts
were Rs. 1120 Crores. But in the revised estimates the same was a
whopping Rs. 25958 Crores.

How this amount got so high?

The answer is : The miscellaneous capital receipts include the money which comes
through disinvestment and our finance minister has pitched for even higher amount
(Rs. 40,000 Crores) in 2010-11 Budget.

This means that the Government will remain on the disinvestment agenda on
which it already pitched.

In his speech our finance Minister says that : "The disinvestment proceeds will be used to
meet the capital expenditure requirements of the social sector schemes for creating new
assets".

This year we saw disinvestment of NTPC, National Hydroelectric Power Corporation,

Oil India Ltd and Rural electrification corporation. The proceeds have been carried in
the revised estimated of Rs. 25000 crores. So this is a way of our government to
meet the fiscal consolidation requirements.

Apart from this, The government also taking on reducing the domestic public debt GDP
ratio.

Here I would like to mention that finance ministry is also considering a review of the
manner in which the government calculates its revenue expenditure. This is because,
all central allocations for schemes such as Jawaharlal Nehru National Urban Renewal
Mission, Pradhan Mantri Gram Sadak Yojana and Rajiv Gandhi Grameen Vidyotikaran
Yojana are shown as revenue expenditure, but they create durable assets.
However these assets may not be always owned by the central government, yet
these expenditures are more in the nature of capital expenditure.
Now lets look at the subsidies which are categorized under non plan expenditures.
The following Graphic shows the Government of Indias expenditure on subsidies:

We can see, that this year Government is reducing the expenditures on subsidies
by Rs. 14801 Crores. This is also one of the steps our government is taking
towards fiscal consolidation.

Union Budget 2010-11: Plan Expenditures

The expenditures of the government are kept in two separate headings viz. plan
expenditures and nonplan expenditures.
What are plan expenditures?
The plan expenditures are expenditures or outlay of the government on various
schemes and programmes which are formulated under the 5 years plans and
other plans of various ministries. Plan expenditures of the government include
revenue expenditure and capital expenditure. In overall, the money is spent on 3
types of plans viz.
1. Central plan: Schemes and programmes which are under the direct control of Central
Government for example. NREGA which is now MNREGA and other flagship programmes.
2. Central Assistance for State & Union Territory Plans: The plans which are run by
the state governments with the assistance of central government. Some examples are
Jawaharlal Nehru Urban Renewal Mission & Accelerated Irrigation Benefit Programme
(AIBP).
3. Union Territory plans : They include the programmes run by UT administration under
the Union Government.

Please have a look on the highlighted rows of the following table:

In the above table we can see that Government of India projects to spend Rs.
230881 Crore in Revenue Expenditures and Rs. 49719 Crore in Capital
Expenditures under the central plan outlays. These two amount in total are called
Total Budgetary Support for central Plan, which comes out to be Rs. 280600
Crores.
Apart from this Government will also spend Rs. 243884 Crores through Internal
and Extra Budgetary Resources of Public enterprises etc. In Total , Govt. has a
Total Central plan Outlay of Rs. 524484 Crore Rupees. Last year this amount
was Rs. 447921 crores (budget estimates ) and Rs. 425590 (revised estimates).

This year the growth in the plan expenditures is Rs. 98894 Crores more than the
revised estimates of2009-10. The growth is more than 23%.

This money will be spent on various programmes and on all sectors of our economy
as follows:

We see in the above

estimates that

Energy Sector draws maximum expenditure from the central plan outlay.

Next comes social services with Rs. 127, 570 Crore Rupees.

So, we now know that in all the Government has projected to spend Rs. 524484
Crores on various programmes under the Central Plan Expenditures.

Budget 2010-11: Non-Plan Expenditures

Non-Plan Expenditure is the outlay on expenditures which are outside the 5 year
plans of the [Link] most important nonplan expenditures are Defense,
Interest Payments and Subsidies.

Some of these expenditures include those which are obligatory in nature, Interest
payments is one example.

The nonplan expenditures may be of both types of development and non-development

expenditure.

Nonplan expenditures include the interest payments, pensionary charges, defense and
internal security or transfers to states.

Please note that expenditure on maintaining the assets created in previous plans is also
treated as non-plan expenditure.

The following table shows the Nonplan expenditures of the Government. We have
discussed the Defense and Interest payments in separate posts.

2010-11
Non-Plan Expenditures (Budget Estimates)

1. NON-PLAN EXPENDITURE

A. Revenue Expenditure

1. Interest Payments and

248664
Prepayment Premium

2. Defence Services

3. Subsidies

87344

116224

4. Grants to State and U.T.

46001
Governments

5. Pensions

6. Police

7. Assistance to States from National

Calamity Contingency Fund / NDRF

42840

22154

3560

8. Economic Services (Agriculture, Industry,

24928
Power, Transport, Communications, Science &
Technology etc.)

9. Other General Services

(Organs of State, tax collection,

17487

external affairs, etc.)

10. Social Services (Education,

29483
Health, Broadcasting, etc)

11. Postal Deficit

3596

12. Expenditure of Union

3190
Territories without Legislature

13. Amount met from National Calamity

Contingency Fund/NDRF

14. Grants to Foreign Governments

Total Revenue Non-Plan Expenditure

-3560

1688

643599

B. Capital Expenditure

1. Defense Services

2. Other Non-plan Capital Outlay

3. Loans to Public Enterprises

4. Loans to State and U.T. Governments

60000

31051

539

89

5. Loans to Foreign Governments

6. Others

Total Capital Non-Plan Expenditure

Total Non-Plan Expenditure

...

379

92058

735657

Budget 2010-11: Expenditures on various Development Programmes Under

Central Plan
After we know the various plan and non plan expenditures, next comes expenditure
on various programmes of various ministries of Government. Here is a list of outlays
on Flagship programmes and other selected important programmes. Please note that
in coming posts, we have discussed each and every programme under respective
sectors. The complete list of these outlays is available on Govt. of Indias Website on
this page. Only some, which are very important and you need to keep in mind follow
here.
1.

Mahatma Gandhi National Rural Employment Guarantee Scheme : Rs.

40100 Crore

2.

Swaranjayanti Gram Swarozgar Yojana : Rs. 2984 Crore (This also

includes Rs.100 crore for Mahila Kisan Sashaktikaran Pariyojana, a SubComponent of National Rural Livelihood Mission)

3.

Indira Awas Yojna : Rs. 10000 Crore

4.

Pradhan Mantri Gram Sadak Yojana : Rs. 12000 Crore

5.

National Rural Drinking Water Programme : Rs. 9000 Crore

6.

Total Sanitation Campaign: 1580 Crore

7.

Integrated Watershed Management Programme: Rs. 2458 Crore

8.

National Land Records Modernization Programme: Rs. 200 crore

9.

National Horticulture Mission : Rs. 1062 Crore

10.

National Food Security Mission: Rs. 1350 Crore

11.

National Agricultural Insurance Scheme: Rs. 950 Crore

12.

Integrated Oilseeds, Oil Palm, Pulses & Maize Development: Rs. 500
Crore

13.

Agricultural Research and Education: Rs. 2006 Crore

14.

National Ganga River Basin Authority: Rs. 500 Crore

15.

Prime Minister's Employment Generation Programme: Rs. 906 Crore

16.

Sarva Shiksha Abhiyan: Rs. 15,000 Crore

17.

National Programme of Mid Day Meals in Schools: Rs. 9440 Crore

18.

Navodaya Vidyalaya Samiti: Rs. 1385 Crore

19.

Adult Education and Skill Development: Rs. 1167 Crore

20.

Integrated Child Development Services: Rs. 8700 Crore

21.

Indira Gandhi Matritva Sahyog Yojana: Rs. 390 Crore

22.

Rajiv Gandhi Scheme for Empowerment of Adolescent Girls: Rs. 1000

Crore

23.

National E-Governance Programme: Rs. 1030 Crore

24.

National Rural Health Mission: Rs. 15440 Crore

25.

Unique ID Authority of India: Rs. 1900 Crore

26.

Rajiv Gandhi Grameen Vidyutikaran Yojana: Rs. 5500 Crore

27.

Restructured Accelerated Power Development and Reform Programme:

Rs. 3700 Crore

28.

Technology Upgradation Fund Scheme (Textiles) : Rs. 2400 Crore

29.

Rashtriya Gram Swaraj Yojana(Ministry of Panchayati Raj) : 50 Crore

On most of the programmes, the Government has increased the outlay.

Agriculture in Budget 2010-11

Budget Announcements:
The Union Budget 2010-11 announces a 4 pronged strategy for Growth of Agriculture
viz. increasing agricultural production, Reduction in wastage of produce, Credit
support

to

farmers

and

impetus

to

food

processing

sector.

Agricultural Production:
1.

Rs. 400 Crore have been provided in the budget 2010-11 for extension of Green
Revolution to the eastern region of the country comprising Bihar, Chhattisgarh, Eastern
UP, West Bengal, Orissa.

2.

Rs. 300 Crore have been provided to organize 60 thousands Pulses and Oil seed
villages .

3.

Rs. 200 Crore have been provided for sustaining the gains already made in the
green revolution areas through conservation farming for soil health, water conservation
and preservation of biodiversity.

Reduction of wastage of produce:

1.

To bring down the difference between farm gate, wholesale & retail prices
government considering the opening up of retail trade

2.

Government plans to meet the deficit in storage capacity through ongoing scheme
for private sectors which involves hiring the go downs from private parties for 7 years by
Food corporation of India.

Credit Support to farmers:

1.

For Year 2010-11 a target of Rs.375000 crore of Agricultural Credit has been
fixed.

2.

Period for repayment of loan has been extended for farmers under the Debt
waiver and Debt relief Scheme

3.

Those farmers who pay the short term crop loans in time eligible to get 2%
interest subvention in 2010-11 (it was 1 % earlier)

Impetus to Food Processing Sector:

1.

Apart from the 10 mega food park projects, Government decides to set up 5 more
mega food parks

2.

Now External commercial Borrowings will be available for cold storage or cold
room facilities.

Outlays:
Total Outlays for Agriculture Ministry in Budget 2010-11 is Rs. 11880 Crore which
involves Department of Agriculture and Cooperation (Rs. 8280 crore) Department of
Agricultural Research and Education (Rs. 2300 Crore) Department of Animal
Husbandry, Dairying and Fisheries (Rs 1300 Crore) . Outlay on some programmes is
as under:
1.

Rs. 6722 crore have been provided for Rastriya Krishi Vikas Yojna.

2.

Rs. 1350 Crore have been provided for National Food Security Mission which
includes Rs. 129.50 Crores for North East India

3.

Rs. 950 Crores have been provided for National Agricultural Insurance
scheme (NAIS) which is in operation since Rabi 1999-2000 season.

4.

Rs. 500 crore have been made for Integrated Oil seed, oil palm, Pulses and maize
Development.

5.

Rs. 1050 Crores have been provided for crop insurance

6.

Rs. 400 Crore have been provided for Technology Mission on Horticulture in North
Eastern Region, Jammu & Kashmir, Himachal Pradesh and Uttrakhand

7.

Rs. 1,061.98 crore have been provided for National Horticulture Mission

8.

Rs. Rs. 1,000 crore have been provided for Micro- Irrigation

9.

Rs. 1000 Crore have been provided for Macro Management of Agriculture

Rural Development in Budget 2010-11

Budget Announcements:
1.

The budget 2010-11provides a total of Rs. 66100 crore Rupees for Rural
Development.

2.

The total Central plan outlay for Department of Rural Development has been kept
Rs. 76,100 crore, this includes Rs. 10,000 crore IEBR (Internal and Extra Budgetary
Resources)

3.

Allocation for Mahatma Gandhi National Rural Employment Guarantee Scheme has
been stepped up to Rs. 40,100 crore from 39,100 crore in 2010-11.

4.

Unit cost under India Awas Yojna has been increased to Rs. 45000 in plain areas
and Rs. 48500 in the hilly areas.

5.

Allocation for Indira Awas Yojna has been increased from Rs. 8800 crore in
Budget 2009-10 to Rs. 10,000 crore in 2010-11.

6.

Allocation to Backward Region Grant Fund has been enhanced by 26% from 5800
crore in 2009-10 to 7300 crore in 2010-11.

7.

Additional central assistance of Rs. 1200 Crore has been provided for drought
mitigation in the Bundelkhand region.

Important Outlays:
1.

Swarnjayanti Gram Swarozgar Yojna: Rs. 2984 Crore including Rs. 301 crore for
NE region

2.

Rs.

2458

Crore

have

been

kept

for

Integrated

Watershed

Management

Programme
3.

Rs. 40100 Crore have been provided for MNREGA

4.

Apart from this Rs. 1016 crore have been kept for Other Rural Development
Programmes such as DRDA Administration (Rs. 405 Crore), NIRD National Institute of
Rural Development (Rs. 105 Crore) , CAPART (Council for Advancement of Peoples
Action and Rural Technology) Rs. 100 Crore , Provision for Urban Amenities in Rural
Areas (PURA) (Rs. 124 crore), Management Support to Rural Development programmes
and strengthening of district planning process (Rs. 120 crore) and BPL Survey (Rs. 162
crore). A provision of Rs. 92 crore has been kept separately as lumpsum provision for the
projects/schemes in the North Eastern Region and Sikkim.

5.

A total of Rs. 120 Crore has been kept for Ministry of Panchayati Raj which
includes 12 Crores in North east and Sikkim, apart from this Assistance for state plans
under the backward Regions Grant Fund is Rs. 5050 Crore.

6.

Rs. 201 crore has been kept for land Reforms in India.

The following Graphic Shows the Increased Outlays for NREGA for last 4 years:

Urban Development in Budget 2010-11

Budget Announcements:
1.

Allocation for urban development in budget 2010-11 has been kept of Rs. 5400
Crore, which was Rs. 3060 crore in the last years budget. The hike is 75%.

2.

Total outlay for Urban sector has been kept Rs.. 7605.75 Crores which includes
Rs. 2205.75 Crore through IEBR (Internal and Extra Budgetary Support)

3.

Allocation for Housing and Urban poverty alleviation raised from Rs. 850 Crore to
Rs. 1000 Crore

4.

1% interest subvention scheme (for loans up to Rs. 10 Lakh and Houses Up to 20

Lakhs) extended till March 31,2011.

5.

Rs. 700 Crore have been provided for Scheme of One percent interest subvention
on urban housing.

6.

Rajiv Awas Yojna, which was launched last year, the budget outlay is Rs.
1270 Crores as compared to Rs. 150 Crore.

What

is

this

provision

for?

This provision is for contribution of National Capital Region Planning Board for
achieving balanced and harmonized development of National Capital Region to
reduce the pressure of population of NCT of Delhi & National Capital Region Other
Urban Development Schemes viz., Development of Satellite Cities/ Counter Magnet
Cities, National Urban Information System, Pooled Finance Development Fund, Urban
Transport Planning, Research and Capacity Building in Urban Sector, Commonwealth
Games, Capacity Building in Urban Transport Sector, National Institute of Urban
Affair, General Pool Residential Accommodation, General Pool Office Accommodation,
etc.
This also includes provision for preparation of City Development Project, Detailed
Project Reports and organizing technical seminars, symposium & consultancy under
the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The provision also
includes

investment

in

Delhi

Metro

Rail

Corporation,

Bangalore

Metro

Rail

Corporation, Kolkata Metro Rail Corporation, Chennai Metro Rail Limited, other Metro
Rail Projects, Bharat Earth Movers Ltd. (BEML) for R&D Centre of Excellence and
execution of Mass Rapid Transport System in Delhi, Bangalore, Kolkata, etc. A new
initiative has been taken by the Ministry to strengthen the transport system of
National Capital Region through a newly constituted body, namely National Capital
Region Transport Corporation.

Micro Small & Medium Enterprises in Budget 2010-11

Position of MSME in India:

MSMEs (Micro, Small and Medium Enterprises) employs about 6 Crore (60 million)
people in India and this sector contributes about 40 per cent to India's overall exports.

This sector was badly hit by the global slump in demand in the Global Financial
Crisis.

There are 26 million MSMEs in the country, contributing about 45 per cent to
India's total manufactured output.

The MSME Ministry had sought Rs 5,000-Rs 5,500 crore over the next three years
to implement the recommendations of the task force.

TKA Nair Committee:

Prime Minister Manmohan Singh in 2009 had constituted a high level task force to
suggest an action plan to help the MSME sector ride out of the global slowdown.

The Report of the Task Force on Micro, Small and Medium Enterprises was
presented to the Honble Prime Minister in January 2010 by its Chairman, Shri
[Link].

The report provides a roadmap for the development and promotion of the Micro,
Small and Medium Enterprises (MSMEs).

It recommends an agenda for immediate action to provide relief and incentives to

the MSMEs, especially in the aftermath of the recent economic slowdown, accompanied
by institutional changes and detailing of programmes, to be achieved in a time bound
manner. In addition, it suggests setting up of appropriate legal and regulatory structures
to create a conducive environment for entrepreneurship and growth of micro, small and
medium enterprises in the country.

Setting up of a Special Fund for the Micro enterprises for exclusive lending to this
sub-sector; introduction of a Public Procurement Policy which mandates government and
PSUs to reach, in a stipulated time period, a target of at least 20 percent of their annual
volume of purchases from micro and small enterprises; and earmarking of additional
public spending of around Rs 5500 crore over a five year period, to specifically target
deficiencies in the existing infrastructure and institutional set up are amongst some of the
major recommendations of the Task Force.

Budget 2010 Announcements:

1.

Allocation for MSME sector has been increased from Rs. 1794 crore to Rs. 2400
Crore. The hike is more than 600 crore Rupees.

2.

Total outlay is Rs. 2550 crore which includes Rs. 150 Crore as IEBR

3.

The Finance Minister announced in his speech "a high level council on small and
medium enterprises will monitor the implementation of the recommendation and the
agenda for action."

4.

The corpus for Micro-Finance Development Equity Fund has been doubled to Rs.
400 Crore in 2010-11.

5.

Earlier, the government had provided interest subvention of 2 percent in preshipment export credit up to March 31, 2010 in certain sectors. Budget 2010-11 has
proposed to extend the interest subvention of 2 percent for one more year for exports
covering handicrafts, carpets, handlooms and SMEs.

6.

Non Plan outlay is Rs. 248.70 Crore thus in overall making the allocation for
MSME Rs. 2648.70 Crore.

Major
1.
2.
3.

Development

Credit

Guarantee

Quality

of

National

Small

Marketing

5.

Khadi

for

Support

Industries

Schemes

in

Micro

Small

and

Institutions

and

Corporation

This

Sector:

Enterprises

Programmes:

Limited

(NSIC)

Development

Assistance

Programme

Village

Industries

Commission

Gandhi

Development
Promotional

&

Scheme

and

Rajiv

7.
8.

Fund

Technology

4.

6.

Programmes

Services

Udyami

Mitra

Yojana

Commissioner
Institutions

(MSME)
and

Programme

9. MSME Clusters Development Programme and MSME Growth Poles

10.

Prime

Ministers

Employment

Generation

Programme

(PMEGP)

11. Scheme of Fund for Regeneration of Traditional Industries (SFURTI):