Rural Development and Panchayati Raj continues to be major thrust areas for the Government to ensure sustainable and more inclusive growth of the country. Emphasizing this during presentation of Budget 2012-13, the Union Finance Minister Pranab Mukherjee announced a major initiative to strengthen Panchayats across the country through RAJIV GANDHI PANCHAYAT SASHAKTIKARAN ABHIYAN (RGPSA).
Mukherjee announced continuance of Backward Regions Grant Fundscheme in 12th plan with enhanced allocation of Rs.12,040 crores, an increase of 22 percent over the BE 2011-12. Attributing poor sanitation and water quality, the main reasons contributing to malnourishment, the Finance Minister proposed to increase the budgetary allocation for rural drinking water and sanitation from Rs. 11,000 crores in 2011-12 to Rs. 14,000 crores in 2012-13. For creating warehousing facilities in rural areas, the Finance Minister proposed to earmark an amount of Rs. 5,000 crores from the enhanced allocation of Rs. 20,000 crores under Rural Infrastructure Development Fund (RIDF).