Union Budget And Other Economic Policies

Union Budget And Other Economic Policies

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Highlights of the Finance Minister Pranab Mukherji's budget speech (2010-2011) delivered on 26 February, 2010, http://indiabudget.nic.in/ub2010-11/bs/speecha.htm

• During 2009, growth had started decelerating and the business sentiment was weak. The economy's capacity to sustain high growth was under serious threat from the widespread economic slowdown in the developed world. 

• There was uncertainty on account of the delayed and sub-normal south-west monsoon, which had undermined the kharif crop in the country. There were concerns about production and prices of food items and its possible repercussions on the growth of rural demand.

• The economy stabilised in the first quarter of 2009-10 itself, when it clocked a GDP growth of 6.1 per cent, as against 5.8 per cent in the fourth quarter of the preceding year. It registered a strong rebound in the second quarter, when the growth rate rose to 7.9 per cent. The Advance Estimates places the likely growth for 2009-10 at 7.2 per cent.

• The growth rate in manufacturing in December 2009 was 18.5 per cent— the highest in the past two decades. There are also signs of a turnaround in the merchandise exports with a positive growth in November and December 2009 after a decline of about twelve successive months.

• A major concern during the second half of 2009-10 has been the emergence of double digit food inflation. There was a momentum in food prices since the flare-up of global commodity prices preceding the financial crisis in 2008, but it was expected that the agriculture season beginning June 2009 would help in moderating the food inflation. However, the erratic monsoons and drought like conditions in large parts of the country reinforced the supply side bottlenecks in some of the essential commodities. This set in motion inflationary expectations. Since December 2009, there have been indications of these high food prices, together with the gradual hardening of the fuel product prices, getting transmitted to other non-food items as well. The inflation data for January seems to have confirmed this trend.

• A Nutrient Based Subsidy policy for the fertiliser sector has been approved by the Government recently and will become effective from April 1, 2010. This policy is expected to promote balanced fertilization through new fortified products and focus on extension services by the fertiliser industry. Over time, the policy is expected to reduce volatility in the demand for fertiliser subsidy in addition to containing the subsidy bill. Government will ensure that nutrient based fertiliser prices for transition year 2010-11, will remain around MRPs currently prevailing. The new system will move towards direct transfer of subsidies to the farmers.

• Provide further capital to strengthen the RRBs (regional rural banks) so that they have adequate capital base to support increased lending to the rural economy.

• The Government intends to follow a four-pronged strategy covering (a) agricultural production; (b) reduction in wastage of produce; (c) credit support to farmers; and (d) a thrust to the food processing sector.

--The first element of the strategy is to extend the green revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern UP, West Bengal and Orissa, with the active involvement of Gram Sabhas and the farming families. For the year 2010-11, Rs.400 crore will be provided for this initiative. Proposal to organise 60,000 "pulses and oil seed villages" in rain-fed areas during 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health, so as to enhance the productivity of the dry land farming areas.  Rs.300 crore will be provided for this purpose. This initiative will be an integral part of the Rashtriya Krishi Vikas Yojana. More focues on conservation farming, which involves concurrent attention to soil health, water conservation and preservation of biodiversity. An allocation of Rs.200 crore will be made for launching this climate resilient agriculture initiative.

--The second element of the strategy relates to reduction of significant wastages in storage as well as in the operations of the existing food supply chains in the country. The deficit in the storage capacity is met through an ongoing scheme for private sector participation where the FCI has been hiring godowns from private parties for a guaranteed period of 5 years. This period is now being extended to 7 years.

--The third element of the strategy relates to improving the availability of credit to farmers. For the year 2010-11, the target has been raised to Rs.3,75,000 crore from Rs.3,25,000 crore in the current year. Under the Debt Waiver and Debt Relief Scheme for Farmers, there is proposal to extend by six months the period for repayment of the loan amount by farmers from December 31, 2009 to June 30, 2010. The effective rate of interest on short-term loans for farmers who repay on timely basis will now be five per cent per annum.

--The fourth element of the strategy aims at lending a further impetus to the development of food processing sector by providing state-of-the art infrastructure. In addition to the ten mega food park projects already being set up, the Government has decided to set up five more such parks. As a part of the farm to market initiative, External Commercial Borrowings will henceforth be available for cold storage or cold room facility, including for farm level pre-cooling, for preservation or storage of agricultural and allied produce, marine products and meat.

• The Jawaharlal Nehru National Solar Mission envisages establishing India as a global leader in solar energy. An ambitious target of 20,000 MW of solar power by the year 2022 has been set under the mission. There will be an increase in the plan outlay for the Ministry of New and Renewable Energy by 61 per cent from Rs.620 crore in 2009-10 to Rs.1,000 crore in 2010-11.

• In order to set up solar, small hydro and micro power projects in Ladakh region of Jammu and Kashmir, an allocation of Rs.500 crore will be made.

• A one-time grant of Rs. 200 crore to the Government of Tamil Nadu towards the cost of installation of a zero liquid discharge system at Tirupur to sustain hosiery industry .

• The draft Food Security Bill will be placed in the public domain very soon. To fulfil these commitments, the spending on social sector has been gradually increased to Rs.1,37,674 crore which now stands at 37 per cent of the total plan outlay in 2010-11. Another 25 per cent of the plan allocations are devoted to the development of rural infrastructure.

• About 98 per cent of habitations are now covered by primary schools. There will be an increase in the plan allocation for school education from Rs.26,800 crore in 2009-10  to Rs. 31,036 crore in 2010-11. In addition, States will have access to Rs.3,675 crore for elementary education under the Thirteenth Finance Commission grants for 2010-11.

• An Annual Health Survey to prepare the District Health Profile of all Districts shall be conducted in 2010-11. There will be an increase in the plan allocation for the Ministry of Health and Family Welfare, from Rs. 19,534 crore to Rs. 22,300 crore for 2010-11.

• An augmentation of Rs.100 crore for each of the Financial Inclusion Fund and a Financial Inclusion Technology Fund, which shall be contributed by Government of India, RBI and NABARD.

• For the year 2010-11, Rs.66,100 crore will be made available for rural development. Mahatma Gandhi National Rural Employment Guarantee Scheme has completed four years of implementation during which it has been extended to all districts covering more than 4.5 crore households. The allocation for NREGA has been stepped up to Rs.40,100 crore in 2010-11. Bharat Nirman has made a substantial contribution to the upgradation of rural infrastructure through its various programmes. For the year 2010-11, there will be an allocation of Rs. 48,000 crore for these programmes.

• The Rashtriya Swasthya Bima Yojana will extend its benefits to all such Mahatma Gandhi NREGA beneficiaries who have worked for more than 15 days during the preceding financial year.

• The unit cost of construction under this Indira Awas YOjana is raised to Rs.45,000 in the plain areas and to Rs.48,500 in the hilly areas. For the year 2010-11, the allocation for this scheme is being increased to Rs.10,000 crore.

• There will be an enhancement in the allocation to Backward Region Grant Fund by 26 per cent from Rs. 5,800 crore in 2009-10 to Rs. 7,300 crore in 2010-11.

• Allocation of Rs. 1,270 crore for 2010-11 as compared to Rs. 150 crore last year for Rajiv Awas Yojana for slum dwellers. This marks an increase of over 700 per cent.

• Micro, Small and Medium Enterprises (MSMEs) contribute 8 per cent of the country's GDP, 45 per cent of the manufactured output and 40 per cent of our exports. They provide employment to about 6 crore persons through 2.6 crore enterprises. A High Level Council on Micro and Small Enterprises will monitor the implementation of the recommendations and the agenda for action. Allocation for this sector will be raised from Rs. 1,794 crore to Rs. 2,400 crore for the year 2010-11.

• The fund corpus for 'Micro-Finance Development and Equity Fund' is being doubled to Rs. 400 crore in 2010-11.

• As a follow up to the Unorganised Sector Workers Social Security Act, 2008, it has been decided to set up a National Social Security Fund for unorganised sector workers with an initial allocation of Rs. 1,000 crore. This fund will support schemes for weavers, toddy tappers, rickshaw pullers, bidi workers etc. To encourage the people from the unorganised sector to voluntarily save for their retirement and to lower the cost of operations of the New Pension Scheme (NPS) for such subscribers, Government will contribute Rs. 1,000 per year to each NPS account opened in the year 2010-11. This initiative, "Swavalamban" will be available for persons who join NPS, with a minimum contribution of Rs. 1,000 and a maximum contribution of Rs. 12,000 per annum during the financial year 2010-11. The scheme will be available for another three years. An allocation of Rs. 100 crore for the year 2010-11 has been made. It will benefit about 10 lakh NPS subscribers of the unorganised sector. 

• The plan outlay for Women and Child Development will be raised by almost 50 per cent. A Mahila Kisan Sashaktikaran Pariyojana to meet the specific needs of women farmers is being launched. Rs. 100 crore will be provided for this initiative as a sub-component of the National Rural Livelihood Mission.

• Allocation of Rs. 1,900 crore to the Unique Identification Authority of India (UIDAI) for 2010-11.


According to the Interim Budget 2009-10 of the Ministry of Finance


• With record procurement of 22.7 million tonnes of wheat and 28.5 million tonnes of rice for India's Public Distribution System in 2008, the granaries are full.

• Annual growth rate of agriculture rose to 3.7 per cent during 2003-04 to 2007-08. The foodgrain production recorded an increase of 10 million tonnes each year during this period and touched an all time high of 230 million tonnes in 2007-08.

• Despite a high base, the outlook for 2008-09 is encouraging with the country receiving normal rainfall during the agricultural season.

• In the period between 2003-04 and 2008-09, our Government increased the plan allocation for agriculture by 300 per cent.

• The Rashtriya Krishi Vikas Yojana was launched in 2007-08 with an outlay of Rs.25 thousand crore, to increase growth rate of agriculture and allied sector to four per cent per annum during the Eleventh Plan period. The scheme has encouraged State Governments to take initiatives to develop the agricultural sector.

• On June 18, 2004, the Government formed by United Progressive Alliance (UPA) had announced a package for doubling the flow of credit to agriculture. The credit disbursements have already gone up from Rs.87 thousand crore in 2003-04 to about Rs.2.5 lakh crore in 2007-08 marking a three fold increase.

• To strengthen the short-term co-operative credit structure, the Government is implementing a revival package in 25 States involving a financial assistance of around Rs.13 thousand five hundred crore. The Government is expected to continue to provide interest subvention in 2009-10 to ensure that farmers get short-term crop loans upto Rs.3 lakhs at 7 per cent per annum.

• The Agricultural Debt Waiver and Debt Relief Scheme for farmers, announced in the last budget speech, was implemented by June 30, 2008 as scheduled.  The Scheme has been able to restore institutional credit to indebted farmers. As per early reports, the total debt waiver and debt relief so far, amounts to Rs.65,300 crore covering 3.6 crore farmers.

• The UPA-I (2004-09) Government was committed to ensuring “food security” in the country and meeting the food requirement of the poor under the Targeted Public Distribution System (TPDS).  In spite of higher procurement costs and higher international prices during the last five years, the central issue prices under the TPDS have been maintained at the level of July 2000 in case of Below Poverty Line (BPL) and Antyodaya Anna Yojana (AAY) categories and at July 2002 levels for Above Poverty Line (APL) category.

• The UPA-I (2004-09) government has ensured remunerative prices for the farmers for their crops.  Since 2003-04, Minimum Support Price (MSP) for the common variety of paddy was increased from Rs.550 to Rs.900 per quintal for the crop year 2008-09. In case of wheat the increase was from Rs.630 in 2003-04 to Rs.1,080 per quintal for the year 2009.

• The National Rural Employment Guarantee Scheme (NREGS) was launched in February 2006 and has now been extended to all the districts of the country.  During the year 2008-09, employment of 138.76 crore person days, covering 3.51 crore households, has already been generated.  The implementation of this programme has resulted in increased wage employment, enhanced wage earnings, improved equity with significant benefits flowing to SC/ST and women.  This has also led to increased demand for and consumption of wage goods.  There has been an allocation of Rs.30,100 crore for NREGS for the year 2009-10.

• The National Rural Health Mission (NRHM) aims to bring about uniformity in quality of preventive and curative healthcare in rural areas across the country. There has been an allocation of Rs.12,070 crore for this programme during the year 2009-10.

• The gross capital formation in agriculture as a proportion of agriculture GDP has increased from 11.1 per cent in 2003-04 to 14.2 per cent in 2007-08

• ‘Priyadarsini Project’ a rural women’s employment and livelihood programme will be implemented as pilot in the district of Madhubani and Sitamarhi in Bihar and Shravasti, Bahraich, Rai Bareli and Sultanpur in Uttar Pradesh.

• Rs.8,000 crore allocated for Mid-day Meals Scheme for the year 2009-10.

• Allocation of Rs.6,705 crore proposed for Integrated Child Development Scheme (ICDS) for the year 2009-10. New WHO child growth standards adopted for monitoring growth of children under ICDS.

• Major subsidies including food, fertilizer and petroleum estimated at Rs.95,579 crore.

Rural Development Schemes running in India


National Rural Employment Guarantee Act (NREGA): The NREGA, which was notified on 7th September, 2005, aims at better livelihood security of households in rural areas of the country by providing at least one hundred days of guaranteed wage employment, in a financial year, to every household whose adult members volunteer to do unskilled manual work. The choice of works suggested in the Act addresses causes of chronic poverty like drought, deforestation and soil erosion, so that the process of employment generation is maintained on a sustainable basis. The Act covered 200 districts in its first phase, implemented on February 2, 2006, and was extended to 330 additional districts in 2007-2008. All the remaining rural areas have been notified with effect from April 1, 2008. The Ministry of Rural Development and National Informatic Centre (NIC) commenced the preparation of appropriate e-governance solution to strengthen NREG scheme way back in October, 2005 and when the scheme was launched in February, 2006, the NREGASoft was also launched across the country.  The software is available to all stakeholders online through http://www.NREGA.nic.in and also could be downloaded for off-line working. The package is Unicode enabled and supports local languages. The training to use the software has been organized in States.


The Central Government bears the costs on the following items:
• The entire cost of wages of unskilled manual workers
• Seventy five percent of the cost of material and wages of skilled and semi-skilled workers
• Administrative expenses as may be determined by the central government, which will include inter alia, the salary and the allowances of the Programme Officer and his supporting staff and work-site facilities
• Expenses of the National Employment Guarantee Council

The state governments bear the costs on the following items:
• Twenty five percent of the cost of material and wages of skilled and semi-skilled workers
• Unemployment Allowance payable in case the state government cannot provide wage employment on time
• Administrative expenses of the State Employment Guarantee Council

Permissible works under NREGA

• Water conservation
• Drought proofing (including plantation and afforestation)
• Irrigation canals
• Minor irrigation, horticulture and land development on the land of SC/ST/ -BPL/IAY and land reform beneficiaries
• Renovation of traditional water bodies
• Flood Protection
• Land Development
• Rural connectivity
• Any other work that may be notified by the Central Government in consultation with the State Government

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India,  http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Sampoorna Grameen Rozgar Yojana (SGRY): This programme was launched on 25th September 2001, with the enshrined objectives of providing additional wage employment ensuring food security while creating durable community, social & economic infrastructure and assets in the rural areas. The programme was evolved by merging two of the then existing schemes of Jawahar Gram Samridhi Yojana and Employment Assurance Scheme (EAS). The programme is self-targeting in nature with special emphasis to provide wage employment to women, scheduled castes, scheduled tribes and parents of children withdrawn from hazardous occupations. However, SGRY along with National Food for Work Programme (NFFWP) have been subsumed in the NREGA districts. The SGRY is Centrally Sponsored Scheme (CSS) on cost sharing basis between the Centre and the States in the ratio of 75:25. In case of Union Territories (UTs), the Centre provides entire funds. Foodgrains are provided, through Food Corporation of India (FCI), free of cost to States and UTs. No contractors are permitted to be engaged for execution of any of the works and no middle men/ intermediate agencies employed for executing works under the Scheme. Use of machinery, which may displace manual labour, is also not permissible with a view to create maximum possible additional employment opportunities. During 2007-08, SGRY is being implemented in 264 districts.

Work prohibited under SGRY

• Buildings for religious purposes and the like
• Monuments, Memorials, Statues, Idols, Arch Gates/ Welcome Gates and the like
• Bridges
• Buildings for higher secondary schools/ senior secondary schools
• Buildings for colleges
• Black topping of roads

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India,  http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Swarnjayanti Gram Swarozgar Yojana (SGSY): The promotion of self-employment amongst the rural poor for their socio economic uplift has been long an integral part of the strategy for poverty eradication. SGSY is the largest self-employment programme for the rural poor. The assisted families (Swarozgaris) may be individuals or groups (Self-Help Groups). However, the emphasis is on the group approach. The objective of the SGSY is to bring the assisted poor families above the poverty line by providing them income-generating assets through a mix of bank credits and government subsidy. It is a holistic programme covering all aspects of self-employment such as organization of poor into Self-Help Groups and taking care of training, credit, technology infrastructure and marketing. SGSY is being implemented by the District Rural Development Agencies (DRDAs) with the active participation of Panchayat Raj Institutions, the banks, the line Departments, and Non-Governmental Organisations. In order to provide incentives to rural artisans, SARAS fairs are also organized in various parts of the country to promote sale of products produced by Self- Help Groups. The SGSY programme was started from 01.04.1999 after restructuring the erstwhile Integrated Rural Development Programme (IRDP) and its allied programmes: Training of Rural Youth for Self Employment (TRYSEM), Development of Women and Children in Rural Areas (DWCRA), Supply of Toolkits in Rural Areas (SITRA) and Ganga Kalyan Yojana (GKY), besides Million Wells Scheme (MWS). The SGSY is financed on 75:25 cost sharing basis between the Centre and the States. SGSY stresses on cluster approach for taking up economic activities. The key activities are to be taken up in clusters. The cluster may not merely be geographic agglomerations but limits where backward and forward linkages can effectively be established. Separate clusters are to be taken up for each activity. More and more Swarozgaris can be added to the cluster each year. The cluster approach in the programmes is adopted to facilitate infrastructure and marketing support to the activity. Families below the Poverty Line (BPL) in rural areas constitute the target group of the SGSY. Within the target group, special safeguards have been provided to vulnerable sections, by way of reserving 50% benefits for SCs/STs, 40% for women and 3% for disabled persons.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India,  http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Pradhan Mantri Gram Sadak Yojana (PMGSY): This scheme was launched in December, 2000 as a 100% centrally sponsored scheme to provide connectivity to unconnected habitations. The scheme is one of the components of Bharat Nirman with the target of providing road connectivity to all habitations with a population of thousand (500 in case of hilly or tribal areas) with all weather roads by 2009. It is expected under the scheme that an expanded and renovated rural road network will lead to increase in rural employment opportunities, better access to regulated and fair market, better access to health, education and other public services, and thus bridge the rural-urban divide and pave the path of economic growth.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India,  http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Indira Awas Yojana (IAY): Housing is one of the basic needs of mankind. The Ministry of Rural Development is implementing the Indira Awaas Yojana since 1985-86 to help build or upgrade homes to households below the poverty line. Rural housing is one of the components of Bharat Nirman package. In a major initiative to impart transparency to the selection process of beneficiaries, a 'permanent waitlist' is being prepared under IAY. The funding of IAY is shared between the Centre and States in the ratio of 75:25. In the case of Union Territories, the entire fund of IAY are provided by the Centre. Under IAY, a BPL family is given grant of Rs. 25,000/- for new construction in plain areas and Rs.27,500/- for construction in hilly/difficult areas. Besides, IAY funds (upto a maximum of 20% of the allocation) can be made available for upgradation or/ and credit-cum-subsidy scheme at the rate of Rs. 12,500/- for each dwelling unit. Since inception of the scheme 171 lakh houses have been constructed with an expenditure of Rs. 1,89,898.56 crore (upto 12/2/08).

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

National Social Assistance Programme (NSAP): The Constitution of India directs the States to provide public assistance to its citizens in case of unemployment, old age, sickness and disability and in cases of other undeserved want within the limit of the economic capacity of the State.  The National Social Assistance Programme (NSAP) was launched for fulfillment of this obligation in 1995-96. The NSAP then comprised of National Old Age Pension Scheme (NOAPS), National Family Benefit Scheme (NFBS) and National Maternity Benefit Scheme (NMBS). Under NOAPS, till 31st March 2006 Rs. 75 per month was being provided per beneficiary over the age of 65 in case of destitution. The amount of pension was increased to Rs.200 per month from 1st April 2006 and States were requested to top up with another Rs.200 from their own resources. Hon'ble Prime Minister in his address on 15th August 2007 made a commitment to provide old age pension to all citizens above the age of 65 years and living below the poverty line.  Accordingly, a new scheme named Indira Gandhi National Old Age Pension Scheme (IGNOAPS) was launched on 19.11.2007 by the Hon'ble Prime Minister. Under the scheme, the States have been asked to certify that all eligible persons have been covered.  The coverage under IGNOAPS is therefore estimated to increase to 157.19 lakh from 87.56 lakhs covered under NOAPS in 2006-07.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Resettlement & Rehabilitation Policy: The National Common Minimum Programme claims that "more effective system of relief and rehabilitation will be in place for tribal and other groups displaced by development projects". Accordingly, the Ministry of Rural Development formulated a revised National Resettlement & Rehabilitation Policy-2007, after wide ranging consultations with the concerned Ministries of Govt. of India, State Govts., members of civil societies and all interested citizens. The provisions of the NRRP-2007 provide for the basic minimum requirements, and all projects leading to involuntary displacement of people must address the rehabilitation and resettlement issues comprehensively. The Rehabilitation and Resettlement Bill, 2007 has been developed on the lines of the provisions of the National Rehabilitation and Resettlement Policy, 2007, so as to give a statutory backing to them. The Bill was introduced in the Lok Sabha on 6th December, 2007 during the Winter Session of Parliament.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Accelerated Rural Water Supply Programme (ARWSP): The Central Government supplements efforts made by the States for providing safe drinking water and sanitation by providing financial and technical assistance under two centrally sponsored programmes namely, the 'Accelerated Rural Water Supply' (ARWSP) and the 'Central Rural Sanitation Programme' (CRSP). Rural Drinking Water is also one of the six components of Bharat Nirman, envisaging coverage of the remaining habitations of Comprehensive Action Plan (CAP) of 1999, dealing with the problem of quality of water in some areas and to address the problem of slippage in the habitations. For promoting the role of Panchayati Raj Institutions in the planning, implementation, operation and maintenance of rural drinking water supply schemes of its choice, 'Swajaldhara' has also been launched. Under the scheme, 90% funds towards the project cost is provided by the government and the beneficiary group has to contribute 10% of the cost.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

'Central Rural Sanitation Programme' (CRSP): This scheme, which was launched in 1986 aims at improving the quality of life of the rural poor and to provide privacy and dignity to women in rural areas. In 1999, 'Total Sanitation Campaign' (TSC) under restructured CRSP was launched to promote sanitation in rural areas. TSC follows participatory demand-responsive approach, educating the rural households about the benefits of proper sanitation and hygiene. Special thrust has also been given on school sanitation and hygiene education. An incentive scheme called Nirmal Gram Puraskar has been launched for Panchayati Raj Institutions, which is helpful in eliminating the practice of open defecation.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Provision of Urban Amenities in Rural Areas (PURA): The Scheme of Provision of Urban Amenities in Rural Areas (PURA), announced by the Hon'ble Prime Minister in his speech on 15th August 2003, aims at bridging the rural-urban divide and achieving balanced socio-economic development. It was implemented on a pilot basis w.e.f 2004–05 for a period of three years in seven States by selecting one cluster of 10 to 15 villages in each of them, to provide physical and social infrastructure in the identified rural clusters to further their growth potential. The pilot phase of PURA was implemented in seven clusters viz. Rayadurg (district Annanthpur in the State of Andhra Pradesh), Gohpur (district Sonitpur in the State of Assam), Motipur (district Muzaffarpur in the State of Bihar), Basmath (district Hingoli in the State of Maharashtra), Kujunga (district Jagatsinghpur in the State of Orissa), Shahpur (district Bhilwara in the State of Rajasthan) and Bharthana (district Etawah in the State of Uttar Pradesh). The budgetary provision for the scheme had been Rs. 10 crores per year in 2004 -05, 2005-06 and 2006 -07. The funds were mainly released for roads, market connectivity, education, drinking water, Common Facility Centre for readymade garment industries etc. The States had reported an expenditure of Rs. 20.27 crores as on 31.12.2007 against the total release of Rs. 30 crores during the pilot phase of PURA. The pilot phase of PURA ended in March 2007.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Integrated Wastelands Development Programme (IWDP): It is a Centrally Sponsored Programme, which has been under implementation since 1989-90. From 1st April 1995, the programme is being implemented through watershed approach under the Common Guidelines for Watershed Development. The development of wastelands and degraded lands under the programme is expected to promote the generation of employment in the rural areas besides enhancing the participation of people at all stages, leading to sustainable development of land and equitable sharing of the benefits. IWDP envisages the development of non-forests wastelands in the country. The basic approach in implementation of this programme has been modified from 1.4.1995 when the Guidelines for Watershed Development through watershed approach came into force. Since then, projects for development of wastelands on micro watershed basis have been sanctioned. 170 projects covering an area of 15.48 lakh hectares were completed by 31.1.2008. During 2007-08, 40 projects were completed by 31.1.08. An area of 3.31 lakh hectares has been treated as a result of completion of these projects in 2007-08.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf


Drought Prone Areas Programme (DPAP): It is the earliest area development programme launched by the Central Government in 1973-74 to tackle the special problems faced by those fragile areas, which are constantly affected by severe drought conditions. These areas are characterized by large human and cattle populations, which are continuously putting heavy pressure on the already degraded natural resources for food, fodder and fuel. The major problems are continuous depletion of vegetative cover, increase in soil erosion and fall in ground water levels due to continuous exploitation without any effort to recharge the underground aquifers. At present, the Drought Prone Areas Programme (DPAP) is under implementation in 972 blocks of 185 districts in 16 States. Till March 1999 the funds were shared on 50:50 basis between the Central Government and the State Governments. However, with effect from 1st April 1999, the funding is shared on 75:25 basis between the Centre and State Government.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

Desert Development Programme (DDP): The Desert Development Programme (DDP) was started both in hot desert areas of Rajasthan, Gujarat and Haryana and the cold deserts of Jammu & Kashmir and Himachal Pradesh in 1977-78. From 1995-96, the coverage has been extended to a few more districts in Andhra Pradesh and Karnataka. The programme has been conceived as a long-term measure for restoration of ecological balance by conserving, developing and harnessing land, water, livestock and human resources. It seeks to promote the economic development of the village community and improve the economic conditions of the resource poor and disadvantaged sections of society in the rural areas. The Desert Development Programme (DDP) is under implementation in 235 blocks of 40 districts in 7 States. With effect from 1.4.1999, the programme is being funded on the basis of 75:25 between the Centre and State Government for the watershed projects sanctioned on or after 1.4.1999.

Source: Annual Report 2007-08, Ministry of Rural Development, Government of India, http://rural.nic.in/annualrep0708/anualreport0708_eng.pdf

National Rural Health Mission (NRHM): The National Rural Health Mission (2005-12) seeks to provide effective healthcare to rural population throughout the country with special focus on 18 states, which have weak public health indicators and/or weak infrastructure. These 18 States are Arunachal Pradesh, Assam, Bihar, Chhattisgarh, Himachal Pradesh, Jharkhand, Jammu & Kashmir, Manipur, Mizoram, Meghalaya, Madhya Pradesh, Nagaland, Orissa, Rajasthan, Sikkim, Tripura, Uttaranchal and Uttar Pradesh.  The Mission is an articulation of the commitment of the Government to raise public spending on Health from 0.9% of GDP to 2-3% of GDP. It seeks to revitalize local health traditions and mainstream AYUSH into the public health system. It aims at effective integration of health concerns with determinants of health like sanitation & hygiene, nutrition, and safe drinking water through a District Plan for Health. The NRHM seeks decentralization of  programmes for district management of health. It seeks to address the inter-State and inter-district disparities, especially among the 18 high focus States, including unmet needs for public health infrastructure. The NRHM seeks to improve access of rural people, especially poor women and children, to equitable, affordable, accountable and effective primary healthcare. It aims at strengthening existing primary healthcare centers (PHCs) and community healthcare centers (CHCs) and provision of 30-50 bedded CHC per lakh population for improved curative care to a normative standard (Indian Public Health Standards defining personnel, equipment and management standards). Every village/large habitat will have a female Accredited Social Health Activist (ASHA), chosen by and accountable to the panchayat so as to act as the interface between the community and the public health system. 



• Reduction in Infant Mortality Rate (IMR) and Maternal Mortality Ratio (MMR)
• Universal access to public health services such as women’s health, child health, water, sanitation & hygiene, immunization, and nutrition.  
• Prevention and control of communicable and non-communicable diseases, including locally endemic diseases   
• Access to integrated comprehensive primary healthcare   
• Population stabilization, gender and demographic balance  
• Revitalize local health traditions and mainstream AYUSH   
• Promotion of healthy life styles  

Source: National Rural Health Mission, Ministry of Health and Family Welfare, Government of India,  http://www.mohfw.nic.in/NRHM/Documents/NRHM%20Mission%20Do

Integrated Child Development Scheme (ICDS): The programme of the Integrated Child Development Services (ICDS) was launched in 1975 seeking to provide an integrated package of services in a convergent manner for the holistic development of the child. It is the only major national programme that addresses the health and nutrition needs of children under the age of six. It seeks to provide young children with an integrated package of services, including supplementary nutrition, health care and pre-school education. Since the needs of a young child cannot be addressed in isolation from those of his or her mother, the programme also extends to adolescent girls, pregnant women and nursing mothers. ICDS services are provided through a vast network of ICDS centres, better known as "Anganwadis". Given the central role of ICDS in this context, and the fact that about half the child population and over 70% of all poor children are malnourished, an effective strategy for children under six must include the universalisation of ICDS, or more precisely, “universalisation with quality”. In concrete terms, “universalisation with quality” would mean: (1) Every settlement has an Anganwadi center; (2) All ICDS services are extended to all children under the age of six years and all eligible women; and (3) Quality of services is radically improved. 


• Lay the foundation for proper psychological development of the child
• Improve nutritional & health status of children 0-6 years
• Reduce incidence of mortality, morbidity, malnutrition and school drop-outs
• Enhance the capability of the mother and family to look after the health, nutritional and development needs of the child
• Achieve effective coordination of policy and implementation among various departments to promote child development

Source: Ministry of Women and Child Development, Government of India, http://wcd.nic.in/icds.htm

Nutrition Programme for Adolescent Girls (NPAG): To address the problem of under-nutrition among adolescent girls and pregnant women and lactating mothers, the Planning Commission, in the year 2002-03, launched the Nutrition Programme for Adolescent Girls (NPAG), on a Pilot Project basis in 51 districts in the country. Under this scheme, 6 kg of food-grains were given to under nourished adolescent girls, pregnant women and lactating mothers. Eligibility was determined on the basis of their weight. The Pilot Project was continued in the year 2003-04 also. It, however, could not be continued in the year 2004-05. The Government approved the implementation of NPAG, through the Department of Women and Child Development, in 51 backward districts identified by the Planning Commission in the year 2005-06 to provide 6 kg of free food-grains to undernourished adolescent girls only (pregnant women & lactating mothers are not covered as these are targeted under ICDS). The scheme is being continued for the Annual Plan 2006-07 on pilot project basis. The funds are given as 100% grant to States/UTs so that they can provide food grains through the Public Distribution System free of cost to the families of identified undernourished persons. The success of the intervention is dependent on effective linkages with the Public Distribution System (PDS).

Source: Ministry of Women and Child Development, Government of India, http://wcd.nic.in

National Old Age Pension Scheme (NOAPS): This scheme is a component of the National Social Assistance Programme (NSAP), which came into effect from 15 August, 1995. It is a 100 percent Centrally Sponsored Programme. The National Old Age Pension Scheme is available to all poor persons aged 65 years or older. Under the NOAPS, the Central Government provides for Rs. 200/- per pensioner per month and the States are urged to contribute an equal amount. The scheme should be implemented as per State guidelines and the old age pension beneficiaries should get the benefit regularly each month. After the expansion of the scheme to all old persons below the poverty line, the scheme has been renamed as “Indira Gandhi National Old Age Pension Scheme”.

Source: Supreme Court Commissioners, Government of India,  http://www.sccommissioners.org/schemes/noaps

Mid Day Meal Scheme (MDMS): The Mid-Day Meal Scheme was launched by the Ministry of Human Resource Development (Department of Education) with effect from 15th August, 1995 for the benefit of students in primary schools under Employment Assurance Scheme (EAS)/earlier Revamped Public Distribution System (RPDS) blocks (2368). The Scheme covers students of Class I-V in the Government Primary Schools / Primary Schools aided by Government and the Primary Schools run by local bodies. Foodgrains (wheat and rice) are supplied free of cost @ 100 gram per child per school day where cooked/processed hot meal is being served with a minimum content of 300 calories and 8-12 gms of protein each day of school for a minimum of 200 days and 3 kgs per student per month for 9-11 months in a year, where foodgrains are distributed in raw form.  In drought-affected areas, the mid day meal is distributed in summer vacations also. To cut down delays in implementation of the scheme, Department of Elementary Education & Literacy has been authorized to make State / UT-wise allocation of foodgrains under intimation to this Department. Food Corporation of India (FCI) releases foodgrains to States/UTs at BPL rates as per allocation made by Department of Elementary Education and Literacy.

Source: Department of Food and Public Distribution, Government of India, http://fcamin.nic.in/dfpd/EventDetails.asp?EventId=152&

Sarva Shiksha Abhiyan (SSA): It is Government of India's flagship programme for achievement of Universalization of Elementary Education (UEE) in a time bound manner, as mandated by 86th amendment to the Constitution of India making free and compulsory education to the children of 6-14 years age group, a fundamental right. SSA is being implemented in partnership with State Governments to cover the entire country and address the needs of 192 million children in 1.1 million habitations. The programme seeks to open new schools in those habitations, which do not have schooling facilities and strengthen existing school infrastructure through provision of additional class rooms, toilets, drinking water, maintenance grant and school improvement grants. Existing schools with inadequate teacher strength are provided with additional teachers, while the capacity of existing teachers is being strengthened by extensive training, grants for developing teaching-learning materials and strengthening of the academic support structure at a cluster, block and district level. SSA seeks to provide quality elementary education including life skills. SSA has a special focus on girl's education and children with special needs. SSA also seeks to provide computer education to bridge the digital divide. Quality issues in elementary education under the SSA will revolve around the quality of infrastructure and support services, opportunity time, teacher characteristics and teacher motivation, pre-service and in-service education of teachers, curriculum and teaching-learning materials, classroom processes, pupil evaluation, monitoring and supervision etc.
Source: Ministry of Human Resource Development, Government of India,  http://ssa.nic.in/

Public Distribution System (PDS): With a network of more than 400,000 Fair Price Shops (FPS), the Public Distribution System (PDS) in India is perhaps the largest distribution machinery of its type in the world. PDS is said to distribute each year commodities worth more than Rs 15,000 crore to about 16 crore families. This huge network can play a more meaningful role if only the system is able to translate into micro level, a macro level self-sufficiency by ensuring availability of food grains for the poor households. The PDS was criticised on a wide front:  its failure to serve the population Below Poverty Line (BPL), for its perceived urban bias, negligible coverage in States with a high density of rural poor and lack of transparent and accountable arrangements for delivery. Given that backdrop, the Government acted to streamline PDS during the Ninth Five Year Plan period by issuing special cards to BPL families and selling to them foodgrains through PDS outlets at specially subsidised prices (with effect from June, 1997). Under the new Targeted Public Distribution System (TPDS) each poor family is entitled to 10 kilograms of food grains per month (20 kg w.e.f. April 2000) at specially subsidised prices. This is likely to benefit about six crore poor families, to whom a quantity of about 72 lakh tonnes of food grains per year is earmarked. The identification of the beneficiaries is done by the States, based on state-wise poverty estimates of the Planning Commission. The thrust is to limit the benefit to the truly poor and vulnerable sections: landless agricultural labourers, marginal farmers, rural artisans/craftsmen, potters, tappers, weavers, blacksmiths, and carpenters in the rural areas; similarly those covered by TPDS in urban areas are: slum dwellers and people earning livelihood on a daily basis in the informal sector like the porters and rickshaw pullers and hand cart pullers, fruit and flower sellers on the pavements, etc. 
Source: Planning Commission, Government of India, http://planningcommission.gov.in/plans/mta/mta-9702/mta-ch8.pdf


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