I am deeply grateful to my good friend, Shri Vijay Kumar Malhotra and 62 other Members, according to my count, who have participated in this debate on the Budget that I presented last Friday.  

As a number of Members have said, the Budget is not a mere statement of receipts and expenditure, though that is what the Constitution says it will be.  Over the years, the Budget and the occasion for making a Budget speech has become a vehicle through which the government  can communicate with the people of India, a report on the state of economy and what the government  will do in the following year to promote economic growth with social justice.  

That is why, the Budget speech has become an event.  From my point of view, it is too much of an event these days, thanks to the media.  Nevertheless, one must adjust one's own feelings and thoughts on the subject in order to meet the requirements of the situation.  

When I heard Shri Malhotra and certain others from the Opposition benches, for whom I have great respect, it occurred to me that they had, perhaps, forgotten that they had also been in office for six years.  I think the habit of sitting in the

Opposition is so ingrained that you have forgotten that for six years, you were in office.  If that is where you would like to sit, let me wish you well.  Continue to sit where you are.  One should, therefore, make a true and correct assessment of what the state of economy was during the six years when the NDA was in office and what the state of economy today is. 

 It is certainly far from my mind to claim that everything was wrong in the NDA period and everything is right under the UPA government.  That is not the purpose of my statement.  The economic progress worldwide is measured on certain terms.  If you and I speak the same language, we must accept the same grammar. 

We cannot claim to speak the same language, if each one follows different grammar. The worldwide economic growth and economic progress are measured in terms of the growth in the GDP, the growth in per capita income, the improvement in human development indicators, the fiscal deficit and the revenue deficit, the external account, particularly the balance of payments and the foreign exchange reserves, the rate of savings and the rate of investment in a country, employment and whether the benefits of growth are shared by a larger and larger number every year. 

Poverty has been a major stigma in this country for several thousand years.   Our common goal is to wipe out the stigma of poverty.  The starting point of the journey, where we can claim that one day, not too distant future, poverty as we have known for five thousand years, is wiped out, is growth.

As I have said many times before, and I say it with humility, with growth there is a chance for equity, there is a chance for inclusive growth.  Without growth there is no chance for equity, there is no chance for inclusive growth.  If you will measure what has been achieved in the last four years in terms which are accepted world-wide, you will find that in the six years that the NDA government  was in office, the average GDP growth was 5.9 per cent, in the four years that the UPA government  is in office, the growth is averaged 8.8 per cent.

Now, the difference between 5.9 and 8.8 is not simply a number close to three.  The difference between 5.9 and 8.8 is the difference between modest growth, which will mean that we will take many years to wipe out poverty, and spirited growth, which will help us double the per capita income every decade, wipe out poverty much sooner than we had expected.

Sir, let me give another figure.  In the 24 quarters between 1998-99 and 2003-04, growth exceeded eight per cent only in three quarters.  After the UPA government  came into office, since the last quarter of 2004-05, that is beginning January 2004, for 13 successive quarters, including the current one, growth has exceeded eight per cent.  Never before, and I say this with some amount of pride but you will forgive me if I sound immodest, in the history of this country have we had eight per cent plus growth and in 13 successive quarters.

Sir, this growth has given us a certain degree of freedom, which we did not have.  No Government  has had in the past.  This growth has given us enormous amount of revenues.  I am not a magician. I do not produce revenues out of thin air.

Revenues come to me because of high growth and because of the stupendous tax buoyancy which everybody has commented upon, we have the capacity today to spend on projects which could never have been imagined four years ago.

In 1997-98, the last year of the UF government , the tax GDP ratio was 9.1 per cent, that is when the Principal Opposition Party led government  came into office. So, they inherited a tax GDP ratio of 9.1 per cent.  When they left government  in 2003-04, the tax GDP ratio was 9.2 per cent.  For six years, they crawled from 9.1 per cent to 9.2 per cent, which is what constrained Mr. Yashwant Sinha and Mr. Jaswant Singh.

In fact, Professor Malhotra is here and if the Leader of the Opposition was here, I would have appealed to him that he should ask me why Mr. Yashwant Sinha and Mr. Jaswant Singh could not do things that we are doing.  They did not have the money because there was not adequate growth, there was not a corresponding increase in the tax GDP ratio and they did not have the money to do the things that we are doing.

When we came into office, as I said, we took over from where they left at 9.2 per cent.  In the year that is coming to an end in 15 days, the tax GDP ratio will increase to 12.5 per cent.  Next year, if I achieve my Budget targets, I would have achieved the tax GDP ratio of 13 per cent.  From 9.2 per cent to 12.5 per cent is an increase of 3.3 per cent, which gives me today the strength and the confidence to undertake programmes and schemes which could never have been imagined irrespective of who was the Finance Minister or who was the Prime Minister at that time.

Another thing has happened; this is the fiscal deficit, the revenue deficit.   When the United Front government  left office, the fiscal deficit was 4.8 per cent.  The first Finance Minister of the NDA assumed office.  He inherited a fiscal deficit of 4.8 per cent.  Kindly note Shri Malhotra, he inherited 4.8 per cent.  When he moved from North Block to South Block, he left for Shri Jaswant Singh a fiscal deficit of 5.9 per cent.  Instead of reducing the fiscal deficit, the fiscal deficit increased from 4.8 per cent to 5.9 per cent.

Likewise, the first Finance Minister of the NDA government  inherited a revenue deficit of 3 per cent.  When he left the office to his successor, he left it at 4.4 per cent.  Surely, instead of creating fiscal space in order to do things which need to be done, the NDA government  in the first five years constrained the fiscal space, and therefore could not do

the many things that we are able to do, and which has caused them such awe and such envy. Thankfully, Shri Jaswant Singh was a luckier Finance Minister or a more capable Finance Minister.  He was able to reduce the fiscal deficit from 5.9 per cent to 4.5 per cent, and reduce the revenue deficit from 4.4 per cent to 3.6 per cent.  When we took office, we had a fiscal deficit of 4.5 per cent.  This year I have reduced it

to 3.1 per cent, and next year I will reduce it to 2.5 per cent.  Likewise, the revenue deficit, when we took over, was 3.6 per cent.  This year I have reduced it to 1.4 per cent, and next year I will reduce it to 1.0 per cent.

I want my dear friends - they are all good friends - to please pay attention to what this means.  What it means to keep the fiscal deficit at 2.5 per cent?

Keeping the fiscal deficit below 3 per cent, when the FRBM which the Parliament has passed allows me to keep it up to 3 per cent, gives me so much fiscal space. 

This gives me fiscal space of 0.5 per cent on a growing GDP which means you and I can decide tomorrow what we will spend this money on?  Do you want to spend it on capital expenditure?  Do you want to spend it on agriculture?  Do you want to spend it on education?  Do you want to spend it on defence?  It will depend upon the context.  It will depend upon the particular need of the year.  There may be a year when we have to spend more on education.  There may be a year, God forbid, when there is a natural calamity like the Tsunami, we may have to spend on Tsunami relief.  There may be a year, again God forbid, when we have to spend this on security.

But I have created the fiscal space.  I have created the fiscal space and I sincerely hope that every succeeding Finance Minister will keep for himself this fiscal space so that Parliament can decide what it wants to spend this money on depending upon the immediate need of that year.  This, I think, is the most important achievement on the fiscal side by the UPA government , namely the creation of fiscal space which gives us tremendous headroom to spend on what we want to spend.

Sir, Prof. Malhotra interrupted me to say you have issued bonds.  I was not the first Finance Minister to issue the bonds.  Your Finance Ministers also issued the bonds.  Let us add the bonds.  Even if we add the bonds, the fiscal deficit including the bonds was 5.58 per cent in 1999-2000 and came down to 5.15 per cent in 2003-04; including the bonds in 2007-08 I have brought it down to 3.66 per cent.  Even so, our record is an impeccable record, a good record.  I wish the record was better.  That is because, as you know, of oil prices.  When the NDA was in office, the highest level to which crude oil reached was 37 dollars a barrel.  Today, it is 110 dollars a barrel. 

It is easy to run an oil economy, it is easy to price petroleum products, it is easy to take a stand on petrol prices, diesel prices and prices of LPG and kerosene when crude oil sells at 37 dollars a barrel.  How much more difficult it is when crude oil is 110 dollars a barrel.  We are not playing in the same field.  The whole rules of the game have changed today.  We are playing in a very different league today.  The same thing applies to all commodity prices.

 The same applies to edible oils which I said in the morning in answer to a question.  The same applies to wheat and rice.  We are in a very different world today than what it was in 2003-04.  The world, where commodity prices and food prices have spiralled putting an almost impossible, intolerable burden upon the developing countries, yet the UPA government , under the guidance of the UPA leadership especially Shrimati Sonia Gandhi ji and under the leadership of the Prime Minister, Dr. Manmohan Singh, has been able to deliver 8.8 per cent average growth in a world, where all commodity and food prices have almost doubled and trebled in some cases.

Sir, I have spoken about tax revenues.  Tax revenues have been a great success of this Government .  I wish to take this opportunity and I invite all hon. Members to join me, to agree with me, to compliment the Department of Revenue of the Ministry of Finance for a remarkable job on tax collection.

We are meeting our targets for indirect taxes year after year.  In fact, we are exceeding it.  On direct taxes we are far exceeding the target giving us a large amount of revenue so that the Members of Parliament of both the Houses can then decide what we will spend on.

Let me give you a few examples of what this tax buoyancy means.  In 2003-04, allocation to Sarva Shiksha Abhiyan was Rs. 1,951 crore.  In 2008-09 - the Budget that we are debating - it is Rs. 13,100 crore.  The Mid Day Meal Scheme, in 2003-04, had received Rs. 1,175 crore. In 2008-09 we have allocated Rs. 8,000 crore.  For rural employment schemes, in 2003-04 it was Rs.4,986 crore.  In 2008-09 we are allocating  Rs.16,000 crore.  I can go on but I do not wish to.  The point that I am making is that growths leading to tax buoyancy and higher tax revenues leads to greater opportunities for

Parliament to decide what the money will be spent on. Without growth, without the tax revenue we could not have done this.  I will return to the subject briefly when we discuss the loan waiver, which has become the central piece of this Budget as I gather from the speeches made by 63 hon. Members. But there is more to this Budget and the loan waiver scheme.

There is a great emphasis on education. What we are doing through the Sarva Shiksha Abhiyan, the Jawahar Navodya Vidyalaya, the Kasturba Gandhi Balika Vidyalaya, the National Means-cum-Merit Scholarship, and above all, the Institute of Higher Education.  Primary education is important.  You mentioned it, and I fully endorse it.  Primary education is the bedrock, on which the whole edifice of education stands.

But the strength of India is also that despite  the tremendous constraints on the education system, we are able to  produce among the best doctors, the best engineers, the best scientists and the best professionals. Why?  It is because we have some very high quality Institutes of Higher Learning. But we must continue to emphasise  Institutes of Higher Education.

 That is why we  have announced a grand scheme  for the central universities, for IITs, for IIMs, for IIITs, for IISERs, and we are providing large grants, something, which no university could have imagined.  We are providing Rs 100 crore each year for institutes,  the Indian Institute of Science in the first year and now, the Mahatma Phule Agricultural University in Rahuri, Maharashtra.  It is equally important that we pay attention to Higher Education because it is the Higher Education, which will give us  the intellectual strength to be leaders in different sectors of our economy.

If the GDP is growing by eight per cent a year; if my allocation increased by less than eight per cent, we will never improve our share of education.  But every year I am allocating to education, 20 per cent more than the  previous year.  So, if the GDP is growing by eight per cent and if I increase the allocation to education by 20 per cent every year, sooner than later, we will achieve the target.  And, the point is that we are in a position to allocate 20 per cent more than last year, and it is only because  our economy is growing  and because we have tax revenues. 

On the health sector, the National Rural Health Mission is the product of this Government .  The National Rural Health Mission is  rolling out throughout the country.  There are difficulties; nobody is saying that  there are no difficulties.  But  ASHAs are being put in place; 24x7, Primary Health Centres are working today; more doctors are being appointed; more untied grants are being given; more district hospitals are being upgraded; and more money is being given to the State Government s to improve health.

Sir, on Women and Child Development, I need not say that the increase has been a massive increase for 2008-09.  For elderly, we have  a number of a number of fiscal concessions as well as  non-fiscal concessions.  On drinking water and sanitation, we are providing more money. On skill development - this is important - whether we have primary education or higher education.

Sir, skill development is very important.  A large number of our boys and girls are  leaving schools.  For a variety of reasons, they leave schools when they complete  VIII classes; they leave schools when they  complete X classes.  The effort is to keep them in schools until they complete XII classes.

But that effort does not always succeed. There are a number of socio-economic factors, which pull them out of schools. We are trying to improve retention. Retention has improved at the primary stage, and we have to improve retention in the secondary stage, that is, the upper primary classes. But these boys and girls who leave school are literate in the sense that they can read and write their names, and they can do simple arithmetic.

But do they have skills? They do not have skills. What has this Government  done in this regard? Please look at the four years. We started by saying that we will upgrade all our ITIs, and that programme is proceeding apace. I have given you the number for it in the Budget speech.

Further, we have adopted a Skill Development Mission, which pulls together all the Skill Development Programmes across various Departments and Ministries.

Thereafter, we decided that it is not enough to take the existing schools or existing institutes and upgrade them. We must start today a massive Skill Development Programme, which is quickly scaled up to cover the whole country. Therefore, we have announced an ambitious National Skill Development Mission. I will garner Rs. 15,000 crore of capital, and I assure this House that we would have rolled it out to many parts of India before the financial year 2008-2009 is out. We would rapidly upscale it, beginning 2008-2009 to cover every part of India, so that every boy and girl leaving school will leave school only with a skill in his or her hand. This is extremely important.

As regards the Unorganised Sector, the Bill is before the Parliament. But, we have announced three major programmes even before the Bill is passed, and these are not symbolic programmes. These are programmes that cover and benefit a very large number of people. The Aam Aadmi Bima Yojana will cover one crore families by 30 September. Why do I have the confidence to say this? It is because I have entrusted it to LIC [Get Quote], which I repeat is a jewel in India's public sector crown.

The Rashtriya Swasthya Bima Yojana is being rolled out on 01 April in Delhi, a State ruled by the Congress Party and in Rajasthan, a State ruled by the BJP. We are not discriminating among one State or another State. It is being rolled out beginning 01 April, and I appeal to all the hon. Members to impress upon their State Government s that the State Government s should quickly join the Rashtriya Swasthya Bima Yojana. Many of them have agreed to join, but they should quickly join. The money is available, and we can roll it out to all the States in 2008-2009.

Thirdly, there is the Indira Gandhi National Old Age Pension Scheme. Why was this pension kept at Rs. 75 in the six years of NDA Government ? Not a pie was increased. We came to the office and we have not given a very large amount, but we have increased it to Rs. 200 and we have asked the State Government s to match it by Rs. 200. Today, let me say with a sense of gratitude that almost all State Government s are matching it with another Rs. 200, and Rs. 400 is available today to the pensioner.

Now, we are trying to deliver this amount using technology; using the Post Office network; and using the bank account, so that there is no leakage on the way, and Rs. 400 is received by all pensioners. Earlier, the condition was that the pensioner must not have progeny on whom the pensioner can depend. Today, we say that the pensioner will get this benefit as long as the pensioner is below the poverty line irrespective of whether the pensioner has progeny or not and whether the pensioner has children or not.

I need not mention the numerous scholarships that we have announced. I was very very disappointed and very anguished when some hon. Members said that there is a communal colour to this Budget. I am deeply sorry. I only see a child when I see a young boy or girl in school struggling to remain in school; struggling to find the money from his or her parents to pay the school fee, to buy the books, to wear a uniform or to wear a pair of slippers. I do not see a Hindu, Muslim, Christian, Sikh or a Buddhist child. I only see a child. .

The point is we have a large number of scholarship programmes in this country, beginning 1947. It is not as though the scholarship programme is invented by the UPA Government . There are many, many scholarship programmes. What we found was a large gap in scholarships that are targeted towards the disadvantaged and neglected sections.
Among them are Scheduled Castes, Scheduled Tribes and now because of the aspiration among the OBCs, the OBCs, and the minorities. Therefore, in the last two years, we have announced new scholarship programmes or expanded existing scholarship programmes. The numbers are being increased so that more children belonging to Scheduled Castes, Scheduled Tribes, OBCs and the minorities can continue in school and college.

I ask you what is wrong with this. We should provide more. But what is wrong if we find that there is a deficiency among certain sections, and there is a gap in certain sections. We are trying to fill the gap by enhancing the scholarships. Now, why do we do it for girl children? There are special programmes for girl children, why? There is gender inequality among boys and girls. It is not as though boy should get scholarship. But when we lean a little in favour of girls and say we will provide a few more scholarships for you, that is to bridge the gender gap or the gender inequality.

Similarly, when we find in society, there is a gap between what the so-called advanced communities have and the Scheduled Castes have; what the first group has and what the Scheduled Tribe has; and what the first group has and what the minorities have. What is wrong, I ask myself, if you lean in favour of those who are left behind. There is a gender gap, there is a caste gap, and there is a religion gap. That gap, that inequality is sought to be filled by providing a few more scholarships. You, Prof. Malhotra, not Vijay Malhotra but Prof. Malhotra, must be the last person to stand up and say that you oppose this scholarship programme. I am deeply disappointed.

Sir, on agriculture, I need not dwell upon it. I have pointed out in my Budget Speech that the gross capital formation in agriculture has increased under the UPA Government  from 10.2 per cent in 2003-04 to 12.5 per cent. There is a question this morning on this. The goal is to raise it to 16 per cent. At the present rate, we will achieve the target of 16 per cent by the end of the Eleventh Plan. We have raised it from 10.2 per cent to 12.5 per cent, but more investment has to be made in agriculture.

I think the key for agriculture - there is, of course, the issue of seeds, the issue of fertilizer, the issue of power and the issue of credit - is water. Unless you provide water, there is no agriculture.

Water is the key. We are spending a lot on AIBP. AIBP was something which I started in 1996-97. Every Government  has continued it. This year we are providing an outlay of Rs. 20,000 crore in 2008-09. But even Rs. 20,000 crore is not sufficient. Every Member has said that there is a medium irrigation project in his State, and there is a major irrigation project in his State, give me more money. Tell me which party, which State, does not require money for irrigation. Everybody wants money for irrigation.

We have provided Rs. 20,000 crore in 2008-09 for AIBP, but that is not enough. Therefore, we are floating this Irrigation and Water Resources Finance Corporation. We will garner a large amount of money and we will pour money into irrigation so that water is available to our farmers.

There is so much to the Budget beyond loan waiver to farmers, although the loan waiver has turned out to be the centerpiece of this Budget. We have appointed the National Council on Climate Change. We are taking it forward this year by saying that we will have an institutional mechanism to deal with aspects of climate change in our own self interest.

Let me repeat, this has nothing to do with Kyoto Protocol, this has nothing to do with the Bali meeting, this has nothing to do with what will happen tomorrow. In our self interest we must address the issue of climate change. There are many eminent scholars and thinkers in this House who understand what I say. It is in our self interest to address issues of climate change and have an institutional mechanism.

We have also looked at the India's soft power. India's soft power is our music, our arts, our cinema, especially our cinema. Virtually in a way Bollywood is uniting this country.

In a way Bollywood is uniting the Indian diaspora. We are proud of all these people. I hope that nobody will call this communal just because Bollywood is dominated by Shahrukh Khan and Saif Ali Khan. We are now going to spend Rs.75 crore through the ICCR in promoting India's soft power.

I have not forgotten the tiger. I feel very passionate when I find that a tiger has been killed. Who are these poachers? Poachers are the actual killers. Behind them are very powerful interests who can finance these poachers and make money out of the tiger skin and whatever they get out of the tiger. We have to eliminate the poacher before the poacher eliminates the tiger. Therefore, we are determined to set up a special Tiger Protection Force. We will raise the force, we will train the force, we will arm the force. I want to send out a clear message that this force will eliminate the poacher before the poacher attempts to eliminate the tiger.

Now I come to what has become the most important part of this Budget, namely, the loan waiver. Loan waiver is debt forgiveness. Debt forgiveness is not unknown in this country.

As early as 1938, under the then Government  of India Act � and now it is Item 30 of List 2 - money-lending and money-lenders and relief of agricultural indebtedness is a State Subject, and is a State Subject today. The answer to many questions about what you are going to do about money-lenders is, it is a matter solely falling within the jurisdiction of the State Government . We can only help the State Government . Parliament or the Central Government  has no executive or legislative power in respect of money-lending and money-lenders.

I announced a loan waiver and now you are asking questions, where will the money come from? Where was this wisdom on Tuesday, Wednesday and Thursday last week? Now you ask the question - how did you decide upon Rs.60,000 crore? How did you decide upon three crore small and marginal farmers and one crore large farmers?

How will you deal with Vidharba and how will you deal with unirrigated land? Where was this wisdom on Tuesday, Wednesday and Thursday last week?

We have done our homework; we have been doing our homework over the last 2-3 months; after doing our homework, we have come to the conclusion that the context, the time, the compelling need is that there must be debt forgiveness.

The IMF and the World Bank have forgiven the debt of Africa, of African countries; the External Affairs Minister is here; India has forgiven the debt of many African countries.           

Today, we are announcing a debt waiver of Rs.60,000 crore.  I am able to do that, as I said before the hon. Shri Advani came, because of the tax buoyancy and because of the fiscal space that we have created by four years of prudent financial management of India's economy.

Sir, as soon as this Government  came into Office, the first policy announcement on behalf of the Government  was made on 18th June, 2004 where I said that farm credit will be doubled in three years.  We actually achieved it in two years.  It was Rs.83,000 crore when the NDA laid down Office.  This year, the target was Rs.2,25,000 crore.  By 31st March we will reach Rs.2,40,000 crore.  Next year I have set a target of Rs.2,80,000 crore.  But in that policy announcement there was a very crucial paragraph and that paragraph read as follows:

"In some parts of the country farmers face acute distress because of the heavy burden of debt from non-institutional lenders, for example money-lenders.  Banks will be permitted to advance loans to such farmers to provide them relief from indebtedness against appropriate collateral or group security.  The Boards of RRBs and cooperative credit institutions will be encouraged to provide such relief by using their local knowledge."

This is a debt swap arrangement which has been enforced in June 18, 2004.  Banks today, and let me make it very clear to hon. Members, so that you can carry it to your constituencies, have been authorized to provide money to a farmer to pay off the money-lender and then become a borrower from the bank.  This scheme is there.  In Andhra Pradesh the State Government  has come forward with a Pavala Vaddi Scheme which encourages farmers to take money from the bank and pay off the money-lender. 

I agree, this scheme has not been a great success.  I tell you why.  For a variety of reasons farmers do not have any records.  There are no perchies.  The money-lender does not maintain any books of account.  For a variety of reasons farmers are unable to take advantage of the scheme.  I am seized of the matter.  RBI is seized of the matter and I will, if I succeed in finding a way out, come out with a scheme by which banks can step in and lend money to the farmer to pay off the money-lender and become an institutional borrower.

So far, and I confess, we have been able to do it in 36,000 farmers' accounts and Rs.105 crore has been paid.  But my effort will be to rapidly multiply this number so that more farmers can take money from the banks and pay off the money-lenders.

Why did farmers fall into this distress?  It is because we paid unremunerative prices.  The key to farmers' distress, apart from other things, is the unremunerative prices.  We cannot get away from these facts.  In 1998-99, the NDA Government  gave Rs.550 as MSP for wheat and six years later in 2003-04, they gave Rs.630, an increase of Rs.80 in a matter of six years.  Today, we give Rs.1000 which is Rs.370 more.  For paddy common variety, in 1998-99, the NDA Government  gave Rs.440 and in 2003-04, they gave Rs.550 which is an increase of Rs.110.  Today, we give Rs.745. Unless you give remunerative prices to farmers, they will be in distress.

How is this distress impacting the PDS?  There was some claim that the PDS was functioning so well in the NDA Government .  Not at all, the figures speak for themselves.  The total off take - that is the measure whether the PDS is functioning well, not the number  of shops and how much grain is lifted from the PDS - of wheat and rice in the NDA Government  were and I am reading the numbers for six years - 186 lakh tonnes, 170 lakh tonnes, 120 lakh tonnes - goes down and then rises - 138 lakh tonnes, 200 lakh tonnes and 239 lakh tonnes.

There are difficulties as the report pointed out there is a leakage of 36 per cent throughout the country.  Some States are less and some States are more but the average for the whole country is 36 per cent.  But who is responsible for the PDS?  We provide the food grains and we provide the subsidy.  But the ration shop is under the control of the State Government .  The shopkeeper is a State Government  appointee or nominee whatever it is.  The monitoring is done by the State Government  so the State Government  must improve upon this so that more people can access the ration shops. 

This is the reason for the distress and we are trying to address the distress in the best manner possible given the head room available for us to address this issue and given the context in which people have committed suicide.  I can read the figures for every year from 1998-99.  It is not as though suicides have been committed today.  Even if one farmer commits suicide, it is a matter on which we should all hang our heads down in shame.  Nobody should commit suicide because he is unable to pay his debt.  Therefore, we came up with what to me is a doable scheme.  When I come up with something doable, you are saying why are you not doing that.  It is a strong logic which pits the undoable against the doable.  The best can never become the enemy of good. 

Here is something which we are attempting on a scale and size that has never been attempted before.  This, I believe, is doable.  If we are all convinced that we can do more, we will do more.  I have announced it on February 29; we are working on the doable package; we are gathering information; and I will make a statement now.  If we can do more, we will do more but when I am doing something which is doable, what is the point in saying why are you not doing that and why are not doing this?  Let me do what is doable and then let us put our collective heads together to see what more can be done.

Sir, in my Budget speech before the House I had announced a package of debt waiver and debt relief for farmers. It was in paragraph 73 of my Budget speech and it may not be necessary to repeat the same today. A number of hon. Members have made valuable and important suggestions so that the well intended debt waiver and debt relief package includes all the deserving farmers, especially the small and marginal farmers. I assure the House that I shall bear in mind every suggestion that has been made during the discussion and try and incorporate some of them to the extent possible in the final scheme.

Sir, wherever one draws the line, however one draws the line, there will be some people who will be at the edge requesting to be included. My intention is to include all deserving farmers and I shall do my best taking into account any compelling circumstances. I may also add that the final package must be affordable, non-discretionary, automatic, simple and easy to implement at the Branch level by the Branch Manager. This is the key. We cannot allow the farmers to run from pillar to post. It must be implementable at the Branch level by the Branch Manager in all the lending institutions throughout the country.

I shall now present the broad contours of financing the package. I surprised you on February 29 and some more surprises await you. At the request of the Government , the RBI and NABARD have asked scheduled commercial banks and RRBs and Co-operative institutions to submit particulars Branch-wise of the overdue accounts by March 14, 2008, that is, today.

After the RBI and NABARD have examined the data, they have been requested to submit the data to the Government  by March 20, 2008. Provisional estimates indicate that the relief to be offered will be around Rs. 60,314 crore comprising Rs. 50,524 crore of debt waiver to small and marginal farmers and Rs. 9,790 crore as relief to other farmers as a one time settlement at 25 per cent of their overdues. Provisional estimates also indicate that about three crore small and marginal farmers and one crore other farmers will benefit if they have overdues as on December 31, 2007.

Please will note that the relief to small and marginal farmers will be about 84 per cent of the total package and the balance of 16 per cent will be the relief to other farmers. In terms of institutions, an estimated 55 per cent of the package will be to borrowers from co-operative institutions � really the benefit is going to the State Government  institutions -- 35 per cent to borrowers from the scheduled commercial banks and 10 per cent to borrowers from the RRBs. Above figures are provisional estimates. 

We will have firm estimates once complete data is available. Upon receiving the data we shall immediately authorise an audit of a random sample of Branches in order to verify the correctness of the data furnished.

As I have indicated in the Budget speech, our goal is to finalise the details of the package in consultation with the RBI, NABARD and the lending institutions so that the process of debt waiver and debt relief is completed by June 30, 2008.

This will ensure that the farmers who will benefit from the debt waiver and debt relief will become eligible for fresh credit immediately thereafter.

As far as the lending institutions are concerned, the amounts overdue as on December 31, 2007 would have been recovered in the normal course over a period of time. Some part may not have been recovered, but I am not alluding to that now. They would have recovered it over a period of time. That is our experience in the past. Government  has, therefore, decided that the lending institutions should be provided equivalent liquidity over a period of 3 years or 36 months.

Sir, I am happy to announce that the farmers' accounts will be cleaned up by June 30, 2008.  The disbursement of funds to the lending institutions will be spread over a period of 36 months beginning from July, 2008.  Hon Members will notice that the period of 36 months span three agricultural years but at the same time, the period falls within four financial years for the purpose of Government  account.  The three agricultural years are as follows:

Year-I             -           1st July, 2008 to 30th June, 2009
Year-II            -           1st July, 2009 to 30th June, 2010
Year-III           -           1st July, 2010 to 30th June, 2011

I have already provided Rs. 10,000 crore in the third supplementary this year itself which I call Year - 0.  This is Year - 0 and not Year - I. Taking into account what has been provided in Year - 0, I propose to release in cash  the compensation to the lending institutions in the following manner.

Immediately after 30th June, 2008, as soon as the first supplementary for 2008-09 is approved by Parliament, Rs. 25,000 crore will  be released to the institutions.  In the Budget, 2009-10, Rs. 15,000 crore will be provided.   In the Budget, 2010-11, Rs. 12,0000 crore will be provided. In the Budget, 2011-12, Rs. 8000 crore will be provided. It is a total of Rs. 60,000 crore. 

In phasing out the package across institutions and over time, we have been and we will be mindful of the need to ensure that all institutions have sufficient liquidity to meet the fresh credit demand. In particular, we will frontload the package in favour of cooperative institutions and RRBs which are typically more liquidity constrained than scheduled commercial banks.

Therefore, nobody needs to worry that cooperative institutions and RRBs  will be constrained.  We will provide most of the money to them.

I am happy and proud that for a third supplementary for this year itself, I have been able to keep aside Rs. 10,000 crores to quick start the farmers debt relief fund.  This has become possible because of higher buoyancy in tax revenue that we are able to establish the funds in Year - 0 itself and that too, with a substantial contribution of Rs. 10,000 crore as the demonstration of the UPA Government  determination to ensure that debt waiver and debt relief package are fully financed and the lending institutions are adequately compensated.

Sir, even as the package is spread over three agricultural years,  hon. Members will kindly note that as much as Rs. 25,000 crore will be reimbursed to lending institutions between 1st July, 2008 and 30th June, 2009, that is, within just  12 months.  We will disburse a further amount of Rs. 15,000 crore by August, 2009 thereby completing two-thirds of the relief package in just 14 months.   In 14 months, I would have given Rs. 40,000 crore to lending institutions.

Financing of the package, Sir, should be relatively easy given the buoyancy in revenues and efforts of expenditure restructuring.   Since I have been able to find Rs. 10,000 crore to establish the funds even in Year - 0, this will reduce the burden in future years.  Given the potential for the rapid growth of the economy, the burden in any single year, if you do the back of envelope calculation, will not be more than 0.25 per cent of the GDP.  Actually, it will be 0.2 per cent of GDP only in 2008-09 and will decline in every successive year and will be only about 0.1 per cent of the GDP in 2011-12.

We can also look at this in terms of absolute numbers. The total expenditure projected for the Financial Year 2008-09 is Rs.7,50,884 crore. The average annual debt relief burden of Rs.15,000  crore is just two per cent of the total expenditure. In future years, the proportion will be even smaller. I am, therefore, very confident that we can finance a burden of this order as part of the regular Budget exercise.

The sources of funds to the Government  are: one, tax revenues; two, non-tax revenues, that is, dividends, interest, royalties, fees; three, non-debt capital receipts, that is, recovery of loans and advances, premium on the sale of sequestered assets and initial listing of public sector enterprises and, four,  additional borrowing, if necessary. The above indicates the hierarchy of the means of finance for the debt waiver and the debt relief package. We should be able to finance the package in each year out of the buoyancy in tax revenues alone. If that is not sufficient, we can tap non-tax revenues and non-debt capital receipts in that order.

Finally, if even that is not sufficient, there will be enough headroom for the Government  to borrow. This will, however, be the last resort.

Sir, I was somewhat disappointed that many knowledgeable commentators have not quite grasped the significance of pegging the fiscal deficit at 2.5 per cent of the GDP well below the FRBM target of 3 per cent. This headroom opens up many possibilities. If, in the future also, we peg the fiscal deficit at 2.5 per cent or even lower, the fiscal space that we will create for ourselves will give us enormous flexibility to incur essential capital expenditure. I am, therefore, totally confident of the Government 's capacity to finance the package over the next three agricultural years out of which two-thirds will be done in 14 months.

In conclusion, I wish to reiterate that one, the estimated cost of the loan waiver package is of the order of Rs.60,000 crore subject to figures being firmed up based on the data that will be furnished by the RBI/NABARD. The number of beneficiaries will be about three crore small and marginal farmers, and about one crore other farmers. Two, the package will be fully financed through payments in cash during a period of 36 months between July 2008 and June 2011.

Three, the financing package is largely front-loaded, as much as Rs.25,000 crore will be disbursed to lending institutions in July-August, 2008 and another Rs.15,000 crore in June-July, 2009. Four, at less than 0.25 per cent of GDP - and even this will decline every year - the total burden is very much within manageable limits. The Government  is confident of financing the package as part of the regular Budget exercise and, five, additional borrowing for this purpose will be the last resort in the unlikely event of resorting to borrowing. It will be well within the FRBM limits.

Sir, with these words, I commend the Budget.