Pro-growth and pro-investment

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: The Budget 2007-08 is pro-growth and pro-investment. The area of focus are Agriculture and Rural economy. More stress has been given on Rural Economy. Indians live in villages with more than 70 % of Indian population in rural areas. Government has recognised this reality and rightly put importance to the rural economy.

Under mission of doubling Farm credit, a target of Rs 225000 crores is set for 2007-08 under which 50 lakhs new farmers are to be covered by the banks as a result of which Agriculture will be developed and banks will have more scope for increasing farm credit .A relief to the farmers in distressed areas is expected from the provision of Rs 1677 crores for interest subvention of 2% for short term crop loan and the special plan for a period of three years in 31 distressed districts in four states. Direct delivery of the fertiliser subsidy to the farmers will help them to reap full benefit in terms of fair price. Measures like ,National Agriculture Insurance Scheme to continue and new initiative for weather based crop insurance scheme will give relief to the rural economy in respect of insurance where the sector is under served. Issue of Government Guaranteed Rural Bonds to the extent of Rs 5000 crores by NABARD will help to mobilise resources for Refinance. Creation of RIDF-XIII for Rs 12000 crore to be used mainly for the distressed districts, and a separate window for Rs 4000 crores for Rural Roads will help in improving the rural infrastructure and also connectivity and communication thus leading to better distribution system.

Measure like Banks and Housing Finance Companies that lend against mortgages can go into three way contract among borrower, lenders and guarantors and creation of mortgage guarantee companies will boost up bank lending to housing sector , which will now become more secured. Enhancement of loan limit to Rs 15000 under DRI Scheme and housing loan limit to Rs20000 will increase bank lending under the scheme and the poor will be more benifitted. Establishment of Financial Inclusion Fund and Financial Inclusion Technology Fund with an initial corpus of Rs 500 cr each will help expansion of clientele base faster and the quality of the bank services will also improve for the poor mass.