Union Budget 1999-2000 Govt. of India Ministry of Finance

Budget Speech


Yashwant Sinha

Speech of Shri Yashwant Sinha
Finance Minister, Government of India
27th February, 1999

but.gif (597 bytes)  National Human Development Initiative (NHDI)

17. Even a half-century after Independence, the levels of human development in India lag behind most other countries. The essence of human development should be to empower vulnerable groups in society to take advantage of the process of development. Empowerment, in my view, entails access to five basic requirements, namely, Food, Health Care, Education, Employment and Shelter. It is our resolve to make them available to the entire population of this country within a decade. With this initiative for people-centred development, we will be implementing the Prime Minister’s mandate for ‘reforming the reforms’.

Food: The Targeted Public Distribution System has been designed to provide food security, especially to those below the poverty line, on the basis of susbidised foodgrain prices. With greater involvement of Gram Panchayats in its supervision and implementation, the Targeted Public Distribution System will be suitably strengthened to ensure its proper coverage and make it efficient.

The Targeted Public Distribution System does not however adequately cover the indigent senior citizens who have no income of their own and none to take care of them in the village. I propose to launch a new scheme, "Annapurna" in 1999-2000, to provide food security to such persons. "Annapurna" will provide 10 kg. of foodgrains per month free of cost to all indigent senior citizens who are eligible for old age pension but are presently not receiving it and whose children are not residing in the same village. The number of persons benefitting from the scheme will not for the present exceed 20% of the old age pensioners within that State. The Gram Panchayat will be required to identify, prepare and display a list of such persons after giving wide publicity.

Health Care: The expansion and improvement of health infrastructure and services are key goals set out in the Special Action Plan announced by the Prime Minister. While an extensive network for primary health care has been created in most rural areas, inadequate community participation and supervision has constrained use of these facilities to much below their capacity. Our goal is to integrate and synergise the existing programmes for health care, family welfare, rural development and related areas in different Central Ministries and to deploy the available resources so that every household secures ready access to both primary health care and family welfare services. The Central Government will provide funds to such Gram Panchayats that come forward with their own contribution to set up primary health care facilities in their respective areas. This will match similar assistance from the concerned State Government.

Education: Access to primary education is critical for empowering people. Several States have recorded considerable success with their respective models of education guarantee schemes. I propose to implement an Education Guarantee Scheme at the national level. The aim will be to provide an elementary school in every habitation, which does not have one within a radius of 1 km. Initially, the local community would provide the premises and select a local person as a part time teacher. Teaching material and other assistance will be provided by the Central and the State Governments, while Gram Panchayats will mobilise contribution from the local community in cash and kind for running the school for at least two years. After the school has functioned successfully for two years, it will be upgraded on a permanent basis. At least 1.8 lakh such schools will become operational during the next three years of the Ninth Plan. The resources available under the existing Centrally sponsored education schemes will be mobilised to support this important initiative. This initiative will provide an opportunity to the rural poor, especially those belonging to the Scheduled Castes, Scheduled Tribes and Other Backward Classes to secure education for their children. This is the first and most important step towards their empowerment.

Employment: At present, a variety of self-employment and wage employment schemes are in operation. To enhance the effectiveness of these schemes in generating income-earning opportunities for the rural poor, Government will follow a four-pronged strategy with the common theme of ensuring greater involvement of Panchayati Raj institutions:

  • The existing scheme of Jawahar Rozgar Yojana will be modified to ensure that all funds are placed at the disposal of Gram Panchayats for creation of rural infrastructure. They will have the sole authority for preparation of annual action plans and their implementation, including the power to execute works with the approval of the Gram Sabha. The modified scheme will be called "Gram Samridhi Yojana".

  • The wage employment programme of Employment Assurance Scheme will be implemented at the district/block levels, with the selection of works being decided by the Zila Parishads in consultation with the other elected representatives. The Employment Assurance Scheme presently operates through out the country. We will give special priority to areas suffering from endemic labour exodus.

  • The Gram Panchayat will maintain a live employment register available to the Gram Sabha and public for scrutiny. To ensure that the funds under the wage employment schemes are spent with the active involvement of the elected Panchayati Raj institutions, it is proposed that while 80% of funds would be released to implementing agencies as per normal procedure, the remaining 20% will be released as an incentive only if the State has put in place elected and empowered Panchayati Raj institutions.

  • The plethora of self-employment programmes for the rural poor will be merged into a single programme called "Swaran Jayanti Gram Swa-Rozgar Yojana", which will have greater participation of the Gram Panchayats. This will enable the implementing agencies to have greater flexibility in execution to meet the needs of the local people.

  • These schemes will largely benefit the poor and the unemployed youth in the rural areas, especially those belonging to the Scheduled Castes, Scheduled Tribes and Other Backward Classes.


Shelter: The rural housing shortage at the beginning of 1997-98 was estimated at nearly 140 lakh units, which included shelterless households and those with only kutcha dwellings. Government’s priority will be to provide shelter to all shelterless poor households by the end of the Ninth Plan. The task of upgradation of kutcha dwellings of poor households will be completed by the end of the Tenth Plan. Furthermore, to ensure integrated provision of shelter, sanitation and drinking water, we propose to launch a comprehensive "Samagra Awas Yojana", which will embrace existing programmes including Indira Awas Yojana.

18. The National Human Development Initiative will go a long way in empowering the weakest sections of the population and improving the quality of rural life. This will minimise the rural-urban disparities. The effectiveness of this initiative will depend critically on the extent to which the Gram Panchayat, as an elected body, can assume a pivotal role in implementing the various components of the programmes. I propose to declare 1999-2000 as the "Year of the Gram Sabha" to affirm our resolve to set the process of decentralised democracy in motion, with human development as the core objective of planning.



19. Turning to shelter in urban areas, we have already taken major steps for encouraging housing development, including repeal of the Urban Land (Ceiling and Regulation) Act. To improve the flow of credit for housing I propose the following measures:

  • To develop the primary and secondary market for housing mortgages, it is necessary to simplify the present legal provisions for foreclosure and transfer of property. I propose to make necessary changes in the foreclosure laws in the housing sector through amendments in the National Housing Bank Act.

  • To strengthen housing finance companies, I will be proposing changes in the tax treatment of the income earned on non-performing assets.

  • To enhance the availability of banking funds to the housing sector, RBI will be advising scheduled commercial banks to lend up to 3% of their incremental deposits for housing finance.

  • National Housing Bank is implementing the Golden Jubilee Rural Housing Finance Scheme for which I announced a target of 1 lakh dwelling units last year. Encouraged by the satisfactory response to this scheme, I propose to increase this target by 25% to 1.25 lakh dwelling units during 1999-2000.

  • The National Housing Bank has proposed a scheme, which entails a reduction in the interest rates for small borrowers. The scheme will be available in towns where Urban Land (Ceiling and Regulation) Act is not applicable. We will provide necessary support to NHB for this purpose. The details of the scheme would be announced by NHB.

20. The development of housing in urban areas also depends heavily on the quality of urban services. Many of our municipal bodies are at present financially too weak to provide basic services. To encourage these bodies to improve their creditworthiness in financial markets, I propose to accord tax-free status to a limited amount of municipal bonds issued each year. A little later, I shall be announcing far reaching tax initiatives to promote housing.





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