New Delhi: Ahead of assembly elections in some key states, the Congress-led United Progressive Alliance (UPA) government on Monday presented a slew of people-friendly proposals in Budget 2011.
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The government has increased wages for workers and helpers in anganwadis (daycare centres mostly in the villages), raised the exemption limit for taxpayers, and extended the scope of a central health insurance scheme to cover workers in mining and associated unorganized sector industries.
Polls are due in Kerala, West Bengal, Tamil Nadu and Assam by mid-year.
The budget has doubled the monthly remuneration for anganwadi workers from Rs1,500 to Rs3,000 and for helpers from Rs750 to Rs1,500. This is expected to benefit 2.2 million people who work under its integrated child development services (ICDS) programme, which provides free immunization for children from poor families and takes care of nutrition for their mothers.
For individual taxpayers, the budget has enhanced the exemption limit in the general category from Rs1.6 lakh to Rs1.8 lakh, providing a uniform tax relief of Rs2,000 to every taxpayer in this category.
For senior citizens, the budget has reduced the qualifying age from 65 years to 60 and increased their exemption limit from Rs2.4 lakh to Rs2.5 lakh. For those who are 80 years or older, it has created a new category of very senior citizens and given a higher exemption limit of Rs5 lakh.
For the benefit of about 300,000 handloom weavers, the government will provide Rs3,000 crore to the National Bank for Agriculture and Rural Development, a regulator for regional rural and cooperative banks, in phases for 15,000 cooperative societies that have become financially unviable.
To woo minority communities, finance minister Pranab Mukherjee, who presented the budget in Parliament, announced that outstanding loans to minority communities have increased to 13.6% of the government’s total priority sector lending this year, and that public sector banks have been asked to achieve a target of 15%. Muslims and Christians form sizable vote banks in the poll-bound states.
In more sops to senior citizens, the government has lowered the age eligibility for availing benefits through the Indira Gandhi National Old Age Pension Scheme for the poor from 65 years to 60 years. It has increased the pension amount from Rs200 to Rs500 a month for those who are 80 years or older.
The UPA’s return to power in the 2009 general election and its victories in state polls are credited to the success of welfare schemes such as its flagship Mahatma Gandhi National Rural Employment Guarantee Scheme, which ensures 100 days of work in a year to one member of every rural family.
More recently, though, the government has been embroiled in a series of corruption charges and has been looking for a breather to reverse its political fortunes.
It has been at the centre of the opposition’s attack for irregularities in the allocation of telecom spectrum, its failure to control rising food prices as well as in bringing back black money allegedly stashed away in foreign banks.
For women, the finance minister has announced the creation of a “Women’s SHGs (self-help groups) Development Fund” with a corpus of Rs500 crore for small borrowers.
The budget extended the interest subvention scheme of providing short-term crop loans to farmers at 7% for the next fiscal year, and increased the additional subvention to 3% in 2011-12 for farmers who repay their crop loans on time.
In an attempt at greater inclusiveness, the budget announced a pre-matric scholarship scheme for four million needy students belonging to the scheduled castes and scheduled tribes and studying in classes nine and 10.
The finance minister announced grants to a bunch of universities, many of these in Tamil Nadu, West Bengal and Kerala.
“All budgets are populist and this one is also... However, apart from elements of populism, the budget has some sensible elements as well,” said N. Bhaskara Rao, psephologist and chairman, Centre for Media Studies.
The budget articulates the government’s intent to move towards direct transfers of cash subsidies to the poor in a phased manner to ensure greater efficiency, cost-effectiveness and better delivery for kerosene and fertilisers.
“The direct cash transfer programme announced for implementation from next year is a smokescreen for this subsidy cut. The current BPL (below poverty line) lists exclude large sections of the country’s poor,” the Communist Party of India-Marxist said in a statement.
Congress spokesman Manish Tewari said the budget was not a populist step but a reflection of India aspiring to become a superpower.