Budget increases focus on rural sector
The Finance Minister Pranab Mukherjee has increased his focus on the rural sector by allocating more budgets for various schemes. The government’s flagship Bharat Nirman project has received budget allocation of Rs58,000 crore, an increase of Rs10,000 crore from current year. Bharat Nirman package includes Pradhan Mantri Gram Sadak Yojana (PMGSY), Accelerated Irrigation Benefit Programme, Rajiv Gandhi Grameen Vidyutikaran Yojana, Indira Awas Yojana, National Rural Drinking Water Programme and Rural telephony.
To provide housing finance to targeted groups in rural areas at competitive rates, the Budget has proposed to enhance the provision under Rural Housing Funds to Rs3000 crore from the existing Rs2000 crore. The government has also proposed the creation of a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana. This would guarantee housing loans taken by Economically Weaker Sections and Low Income Group households and enhance their credit worthiness.
The Union Budget has also proposed to increase the corpus of Rural Infrastructure Development Fund (RIDF) from Rs16,000 crore to Rs18,000 crore. The additional allocation would be dedicated to creation of ware housing facilities. The RIDF is an important instrument for routine bank funds for financing rural infrastructure.