The government is expected to earmark Rs 6,200 crore (Rs 62 billion) for two new rural infrastructure schemes. The amount will be given to the rural development ministry for the new food for work programme, which will use it to launch a people's water conservation mission. "This will be announced in the Budget," said a government official.
"The water mission was mentioned by Prime Minister Manmohan Singh as one of the goals for the ministry to conserve rain water for irrigation. The money allocated for the programme will be spent primarily on building small check dams across the country," said the official. The finance ministry has already given a go-ahead to the programme.
Another scheme for which funds are expected to be granted is the new Bharat Nirman Programme. The programme, which will be launched as part of the Swarnajyoti Grameen Swarozgar Yojana, will make it easier for self-help groups to get small loans and micro-credit.
"Last year, the allocation for the programme was Rs 800 crore (Rs 8 billion) for the 1.8 million self-help groups under the programme. This year the allocation is expected to go up to Rs 1,000 crore (Rs 10 billion)," said an official.
In fact, the addition of Rs 200 crore (Rs 2 billion) to the total amount of advance subsidy given to banks in rural areas seems to be a compromise formula, as a strong missive has already been sent by the rural development ministry on the poor performance of banks.
"We had undertaken a survey of banks that have been particularly at fault for not extending loans despite receiving advance subsidy," said an official.
According to the survey, a total of 700 rural branches of different banks showed "no lending" to SHGs. The problem is severe in Bihar, Uttar Pradesh, Orissa and some of the states in the Northeast. The ministry has suggested that performance of bank officers, who are to be promoted in rural areas, be evaluated on lending to the SHGs as well.
