The government Wednesday announced a scheme to bring the unorganised rural workers under a safety net by providing insurance.

The scheme, 'Aam Admi Bima Yojana', will be launched by the Life Insurance Corporation of India and will provide death and disability insurance, Finance Minister P Chidambaram said presenting the Budget proposals for 2007-08.

The Centre will bear 50 per cent of the premium of Rs 200 per year per person, he said.

The finance minister urged the state governments to come forward to bear the remaining portion on behalf of the beneficiaries.

Taking into account the annual cost to the Centre, he placed Rs 1,000 crore in a fund to be maintained by LIC.

Signalling the United Progressive Alliance government's concern for the welfare of unorganised workers, the new scheme will cover rural landless household which has no insurance cover.

The head of the family or one earning member in the family will be insured under the new scheme which seeks to fulfill a commitment made in the UPA's National Common Minimum Programme.

Chidambaram proposed to finalise the scheme in consultation with State Governments and implement it in 2007-08.

With a view of giving incentive to employers in organised sector to provide regular employment to physically challenged persons, Chidambaram proposed a scheme to reimburse employer's contribution to the Employees Provident Fund and Employees State Insurance for the first three years.

He said the government would reward the employer once physcially challenged employee was regularised and enrolled under the EPF and ESI.

He also said the government was ready to support creating of about one lakh jobs every year for the physically challenged persons with a salary limit of Rs 25,000 per month.

The finance minister estimated the cost to the government at Rs 150 crore per year rising to Rs 450 crore per year when the scheme is fully rolled out. The Centre has earmarked Rs 1,800 crore for this purpose in the Budget.

As many as 1,396 Industrial Training Institutes have been proposed to be upgraded into Centres of Excellence in specific trades and skills under public-private partnership.

The finance minister also proposed to grant an interest-free loan of upto Rs 2.5 crore to each ITI for upgradation and revision of courses and sought the cooperation of states in upgrading at least 300 ITIs every year. He said Rs 750 crore has been kept aside for this purpose.