Populism took centre stage as finance minister P. Chidambaram gave primacy to agriculture and the social sector while presenting the Rs.680,521-crore ($148 billion) general budget for 2007-08.

"Agriculture must top the agenda for policy makers and hold the first charge on resources," the finance minister said in his 100-minute speech in the Lok Sabha.

"The declared objective is faster and more inclusive growth," Chidambaram said as he enhanced budgetary allocations for education, agriculture, water, child development, women welfare, urban renewal, employment guarantee schemes and social security net.

In a bid to bring down overall inflation and help curb the rise in the prices of some food items, he said excise duty on crude oil would be reduced to 6 per cent from 8 per cent and futures trading banned immediately in wheat and rice.

The finance minister said he was also giving a new thrust to agriculture, on which two-third of the 1.17 billion population still depends, the small taxpayer and small service provider. "Faster economic growth has given us, once again, the opportunity to unfurl the sails and catch the wind."

"We need faster growth because, at our level of incomes, there can be no doubt that we must expand the production base of the economy if we want to provide broad-based improvement in the material conditions of living of our population, .......... But growth alone is not enough if it does not produce a flow of benefits that is sufficiently wide-spread. We, therefore, need a growth process that is much more inclusive, .......... and which also ensures access to essential services such as health and education for all sections of the community," said prime minister Manmohan Singh.

The increased allocation to agriculture in terms of rural infrastructure and the proposed Rs 2,25,000 crore farm credit in the new budget, the government hoped to spur agricultural growth rate from the current 2.3 per cent to the targeted 4 per cent, in turn improving the lives of the people dependent on this sector.

Agriculture - Proposals
Farm credit: Target of Rs225,000 crore for 2007-08 with an addition of 50 lakh new farmers to the banking system; provision of Rs1,677 crore for 2 per cent interest subvention for short-term crop loans; a special plan being implemented over a period of three years in 31 specially distressed districts in four states, involving a total outlay of Rs16,979 crore - of this, about Rs12,400 crore to be on water-related schemes; special plan includes a scheme with proposed provision of Rs153 crore for induction of high-yielding milch animals and related activities.

Pulses Mission: Integrated oilseeds, oilpalm, pulses and maize development programmes to be expanded with sharper focus on scaling up production of breeder, foundation and certified seeds; government to fund the expansion of Indian Institute of Pulses Research, Kanpur and offer producers a capital grant or concessional financing to double production of certified seeds within a period of three years.

Plantation Sector: Financial mechanisms for re-plantation and rejuvenation to be put in place for coffee, rubber, spices, cashew and coconut.

Accelerated Irrigation Benefit Programme: Thirty-five projects likely to be completed in 2006-07 and additional irrigation potential of 900,000 hectares to be created; outlay to be increased from Rs7,121 crore to Rs11,000 crore, including grant component to state governments of Rs3,580 crore - an increase from Rs2,350 crore.

Rainfed Area Development Programme: Proposed allocation of Rs100 crore for the new Rainfed Area Development Programme.

Water Resources Management - Restoring Water Bodies: World Bank loan agreement signed with Tamil Nadu for Rs2,182 crore to restore 5,763 water bodies having a command area of 400,000 hectares; agreement for Andhra Pradesh expected to be concluded in March 2007 to cover 3,000 water bodies with a command area of 250,000 hectares.

Ground Water Recharge: Full subsidy to small and marginal farmers and 50 per cent subsidy to other farmers to be given to divert rain water into ''dug wells''; Rs1,800 crore to be transferred to NABARD.

Training of Farmers: Indian Council of Agricultural Research (ICAR) to set up teaching-cum-demonstration models of water harvesting in 32 select state agricultural universities and ICAR institutes; each institution to train 100 freshers and 1,000 farmers every year; interest-free loan of Rs3 crore to be provided to each institution to create a corpus fund.

Extension System: New programme to be drawn up that will replicate earlier training and visit (T&V) programme; Agriculture Technology Management Agency (ATMA) now in place in 262 districts to be extended to another 300 districts; provision for ATMA to increase from Rs50 crore to Rs230 crore.
Fertiliser Subsidy: Based on study to be conducted, a pilot programme to be implemented for delivering subsidy directly to farmers.

Agricultural Insurance: National Agricultural Insurance Scheme to be continued for Kharif and Rabi 2007-08 with a provision of Rs500 crore; a weather-based crop insurance scheme to be started by Agricultural Insurance Corporation on a pilot basis as an alternative to NAIS; allocation of Rs100 crore to be made in 2007-08.

National Bank for Agriculture and Rural Development: To augment its resources for refinancing rural credit cooperatives, NABARD to issue government-guaranteed rural bonds to the extent of Rs5,000 crore with suitable tax exemption.

Rural Infrastructure Development Fund: Corpus of RIDF-XIII to be raised from Rs10,000 crore to Rs12,000 crore; separate window for rural roads to continue with a corpus of Rs4,000 crore.

Social Security: New scheme called ''Aam Admi Bima Yojana'' to be introduced for death and disability insurance cover through LIC to rural landless households which enjoy no cover at all today; head of family or one earning member in family to be insured; government to bear 50 per cent of premium of Rs200 per year per person; Rs1,000 crore to be placed in a fund to be maintained by LIC.