Highlights of Budget 2006

Big Picture

• Finance minister says economic prospects for 2005/06 just as good as last year
• GDP growth likely to be 8.1 percent in 05/06
• Government aims to raise GDP growth to 10 percent
• Gross budgetary support for 2006/07 at 1.73 trillion rupees
• FDI inflows up to November 2005 at $4 billion

Rural Investment

• Farm sector output likely to grow 2.3 per cent in 2005-06
• Government to spend Rs 117 billion ($2.60 billion) on rural jobs guarantee scheme in 05/06
• Government to allocate 186.96 billion rupees for rural infrastructure projects in 2007-07
• Banks to raise farm credit to Rs 1.75 trillion in 06-07 from 1.42 trillion
• Farmers to receive short-term credit at 7 per cent

Health and Education

• Education spending to be increased by 31.5 per cent, and health spending by 22 per cent
• Allocation for primary education increased to Rs 100.41 billion from 71.56 billion
• Allocates more funds for education of minorities, schemes for lower caste people

Industries

• Government to promote textiles, automobiles, leather, food processing and tourism for job creation
• Food processing sector to be treated as a priority sector for bank lending
• Petroleum, chemicals and petro-chemicals investment zones to be set up
• India to be promoted as a semiconductor manufacturing hub

Infrastructure

• Government aims to raise power generation capacity by 15,000 megawatts by March 2007
• Comprehensive review of coal policy needed
• Government expects investment of 220 billion rupees in oil refining over next few years. The government will encourage investment in refineries, pipelines and green fuel.
• Highways development programme to receive Rs 99.45 billion in 2006-07. The government has identified three new road projects to be built under a new special purpose vehicle.