One of the first acts of the Prime Minister, Shri
Deve Gowda, was to convene a meeting of Chief Ministers on Basic
Minimum Services. This reflects the resolve of the United Front
to "advance the principles of political, administrative and
economic federalism". The Chief Ministers' Conference
recommended adoption of seven objectives to be attained by the
year 2000. These are 100% coverage of provision of safe drinking
water; 100% coverage of primary health centres; universalisation
of primary education; public housing assistance to all
shelterless poor families; extension of the mid-day meal
scheme; road connectivity to all villages and habitations; and
streamlining the public distribution system targeted to families
below the poverty line.
These objectives are now being served by
Centrally-sponsored schemes and schemes in State Plans. Hon'ble
Members will be glad to know that I am providing an additional
amount of Rs.2,466 crore as Central assistance for State and UT
plans to significantly increase the availability of funds for
these schemes. From this amount, it is our intention to allocate
about Rs.250 crore to provide shelter and other basic amenities
to slum dwellers. The distribution of this enhanced allocation
across the seven schemes and across States and Union Territories
will be determined by the Planning Commission in consultation
with them.
Infrastructure Financing
The Update of the Economic Survey has highlighted
the enormous challenge on the infrastructure front. The state of
our infrastructure - particularly power and roads - is very poor.
We cannot sustain a 7 per cent growth unless we can revitalise
these infrastructure sectors. Huge funds are also required for
telecom, railways and ports.
Infrastructure needs long-term finance, typically
15-20 year financial instruments. However, it has not been
possible to float such instruments in the Indian market so far.
Hence, I am proposing the establishment of an Infrastructure
Development Finance Company (IDFC). This company will be
incorporated with an authorised share capital of Rs.5,000 crore.
The Central government, the RBI, banks and financial institutions
will contribute to the share capital. I am making a budgetary
provision of Rs.500 crore in the current financial year as the
contribution of the Central government. The RBI's initial
contribution to the share capital will also be Rs.500 crore.
Among other things, the IDFC will act as a direct lender, as a
refinancing institution and as a provider of financial
guarantees. I believe that the IDFC will induce investors, both
Indian and foreign, to make available long-term funds at the
lowest possible market rates.
I am also proposing some tax incentives for
infrastructure investment which I shall outline later.
Hon'ble Members are aware that the Central
government has already set up the National Highway Authority of
India. We need a world-class national highway system in place
very quickly. I have decided to provide a sum of Rs.200 crore
to strengthen the capital base of the National Highway Authority
of India. The Authority will now be in a position to leverage
resources for highway development from both within India and from
outside.
