Home
» Budget 2001 - 02 »
Union Budget 2001-02 » Union
Budget Highlights Part I
New Delhi, Feb 28: Following are the highlights of the budget 2001-2002 presented by finance minister Yashwant Sinha in parliament today.
Budget strategy:
- Accelerated reforms in the agricultural sector
- Food economy and rural development programmes trageted.
- Intensification of infrastructure investment, continued reforms in the financial sector and capital markets, deepening of structural reforms - dismantling controls constraining economic activity.
- Human development through better education opportunities and social security.
- Reduction in non-productive expenditure and rationalisation of subsidies
- Acceleration of the privatisation process and restructuring of public enterprises.
- Widening of the tax base and toning up the tax administration.
- Corpus of NABARD's RIDF VII increased from Rs 4,500 crore to Rs 5,000 crore next year and interest charged reduced from 11.5 per cent to 10.5 per cent.
- Kisan Credit Cards to all eligible agricultural farmers within the next three years. (110 lakh cards issued since 1998-99).
- KCC holders to get personal insurance package to cover them against accidental death or permanent disability on subsidised premia.
- NABARD to link one lakh additional self-help groups during 2001-2002, which would help in providing access to credit to additional 20-lakh families. Share-croppers and tenant farmers to also become eligible.
- Credit linked subsidy scheme for construction of cold storages for perishable commodities extended to rural godowns.
- NABARD to reduce rate of interest for funding the storage of crops, from 10 percent to 8.5 percent.
- New scheme for setting up agriclinics and agribusiness centres by agricultural graduates.
- On-farm water management for increasing crop production in eastern india (rs 70 crore).
- Technology mission for integrated development of horticulture in the north-eastern states (Rs 38 crore).
- Pradhan Mantri Gram Sadak Yojana (Rs 2,500 crore) to provide connectivity of every village with a population of over 1,000 persons through good all weather roads by the year 2003 and those with a population of up to 500 persons by the year 2007.
- PMGY extended to cover rural electrification also.
- Total rural electrification in the next six years.
- Enhanced REC credit support to SEBs for speedy electrification of dalit bastis, scheduled tribe households and other weaker sections of society.
- Rs 750 crore earmarked from ridf for rural electrification.
- Greater involvement of state governments in procurement and distribution of foodgrains for pds. Financial assistance to the state governments to enable them to procure and distribute foodgrains to BPL families at subsidised rates.
- Essential Commodities Act, 1955 to be reviewed and restrictions on the free inter-state movement of foodgrains to be removed. The number of commodities declared as essential under the act to be brought down.
- The central government to accelerate the programme of reforms in SEBs anchored in the Centre-state partnership on the following:
- A time-bound programme for installation of 100 percent metering by December 2001. Energy audit at all levels.
- A specific programme for reduction and eventual elimination of
power theft.
Tariff determination by SERCs and compliance thereof.
Banking services recruitment boards to be abolished by July 31, 2001 or earlier. Banks to do all future recruitment themselves.
Capital Account Liberalisation:
- Indian companies may now invest abroad up to 50 million dollars annually through the automatic route without being subject to the three year profitability condition.
- Companies which have issued ADRs/GDRs may henceforth make foreign investments up to 100 percent of these proceeds; up from the current ceiling of 50 percent.
- Indian companies that have issued ADRs/DGRs, may acquire shares of foreign companies up to an amount of 100 million dollars or an amount equivalent to ten times of their exports in a year, whichever is higher.
- Indian companies to be permitted to list in foreign stock exchanges by sponsoring ADR/GDR issues against block share holding. This facility would have to be offered to all categories of shareholders.
- The 40 per cent limit of investment in a company under the portfolio investment route by FIIs being increased to 49 per cent.
- Provided that foreign investors bring in a minimum of 50 million dollars, Foreign Direct Investment (FDI) in non-banking financial companies (NBFCs) would not have to be accompanied with a divestment of a minimum of 25 per cent of their holding in the domestic market.
- The deadline of March 2002 for dismantling of the administered pricing mechanism (APM) in the petroleum sector to be adhered to.
- Phased programme of complete decontrol of urea by April one, 2006 as recommended by the expenditure reforms commission.
- The unit specific Retention Price Scheme (RPS) to be replaced by a group concession scheme with effect from April one, 2001.
- The rate of concession for urea units based on naphtha/FO/LSHs will be linked to international prices of these feed stocks with effect from April one, 2001.
- Commercialisation of distribution.
- SEB restructuring.
- Allocation to the accelerated power development programme (apdp) stepped up to rs 1,500 crore from a level of rs 1,000 crore in 2000-2001.
- Electricity Bill 2001 to be introduced.
- The plan outlay for central sector power utilities is being raised from Rs 9,194 crore in 2000-2001 to B.E. of Rs 10,030 crore for 2001-2002.
Roads:
- The total plan outlay for this sector is being enhanced by 93 per cent to Rs 8,727 crore in 2001-2002.
- Phase I of the national highway development programme to be completed by December 2003.
- Rs 962 crore assistance to states from the cess fund for state roads and Rs 2,500 crore for the Pradhan Mantri Sadak Yojana.
- Competition being introduced in all service segments.
- Convergence bill to cover telecommunications, information technology, and information and broadcasting sectors in an integrated manner to be introduced.
- Financial sector and capital markets reforms to continue.
- A clearing corporation for further orderly development of money market (including repo), government securities market and settlement of forex transactions will be set up.
- RBI to set up an electronic negotiated dealing system by June 2001 to facilitate transparent electronic bidding in auctions and dealings in government securities on a real time basis.
- Reserve Bank of India to set up Electronic Fund Transfer (EFT) and Real Time Gross Settlement Systems (RTGs) within the next year.
- Removal of taxation anomalies to promote the issuance of strips, zero coupon bonds, deep discount bonds, and the like.
- Public debt act to be replaced by government securities act.
- Seven more debt recovery tribunals to be set up during 2001-02.
- Legislation to facilitate foreclosure and enforcement of securities in cases of default to be introduced.
