New Delhi: In a bid to check the increasing dropout rate from schools after Class 8, the government today decided to allocate Rs 3004.04 (about Rs 30 billion) crore as scholarship to poor students. This was announced by the Union Finance Minister P Chidambaram in New Delhi today.

The Cabinet Committee on Economic Affairs (CCEA) today gave its approval to the centrally sponsored National means-cum-merit-scholarship during the 11th Five Year Plan. This would cost the government an extra amount of Rs 3004.04 crore during the 11th Five Year plan.

Each year at least 1,00,000 scholarships of Rs 6,000 per annum each would be awarded to meritorious students of economically weaker sections of the society beginning from class 9 and would be continued till class 12.

However, the annual income of the families of these students should not be more than Rs 1,50,000. The scholarship is meant for student studying in government, local body and government aided schools.

The selection would be held at state level for the students of class 8 to find out the eligible candidates for the scholarship. This will be conducted along with the first stage selection test of the National Talent Search Examination conducted by the state governments under guidance of NCERT.

To fund this scheme, a corpus of Rs 750 crore will be created with the State Bank of India (SBI) in 2008-09 and a like amount would be added to the fund every year the next 3 years. The yield from the fund would be used for the scholarship scheme.