Plan to lower school dropout rate gets nod

The UPA government today gave the green signal to one of its key pro-poor promise, the National Means-cum-Merit Scholarship scheme, which will be funded through a corpus of Rs 3,004 crore.

The scheme aims to check the dropout rate among economically weaker students of Class VII and encourage them to continue in the school up to Class XII. The scheme envisions award of scholarships to meritorious students, who will be selected on the basis of a state-level test.

The test would be conducted along with the first-stage selection test of the National Talent Search Examination conducted by state governments under the guidance of the NCERT.

The decision was taken at a meeting of the Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh today.

Finance Minister P Chidambaram said each year at least one lakh scholarships (Rs 6,000 per student per year) would be awarded to students at the beginning of Class IX. The scholarships would be only for students whose family income is not more than Rs 1.5 lakh per year and for studying in government, local body and government-aided schools.

Chidambaram said to fund this scheme, a corpus of Rs 750 crore would be created with the State Bank of India in 2008-09. A similar amount would be added to the fund every year for the next three years.

"The yield from the fund will be used for the scheme. The requirement of funds for creation of the corpus during the XIth five-year Plan would be Rs 3,000 crore. The expenditure on scholarships during the 11th Plan would be Rs 600 crore," he said.

Reservations would be applicable according to the norms in different states, he said.

The selected students would be given ATM cards of the State Bank of India and they would be able to directly operate the account in which the scholarship amount would be deposited, he said.