Budget 2019: Will the Modi govt opt for more direct benefit transfer schemes for farmers?

Budget 2019: Will the Modi govt opt for more direct benefit transfer schemes for farmers?

The NITI Aayog has suggested that all subsidies for agriculture, including fertiliser, electricity, crop insurance, irrigation and interest subvention be replaced by income transfer. Telangana and Odisha have adopted income support as opposed to loan waivers. Will the government adopt any such models this budget?

Arvind Shukla

Arvind Shukla   4 July 2019 2:40 PM GMT

Finance Minister Nirmala Sitharaman is all set to present the first Union budget of Modi government 2.0. 14.5 crore Indian farmers have lot of hopes and expectations from the government.

Doubling farmers' income by 2022 was one of the top agendas of NITI Aayog's meeting held just before the budget. The general impression is that the Budget will provide the much-needed financial assistance to the farming sector.

The Modi government had launched Pradhan Mantri Kisan Samman Nidhi Yojna (PMKSY) in 2015. Under this initiative, 120 million small and marginal farmers who have less than 2 hectares (4.9 acres) of landholding will get up to ₹6,000 per year as minimum income support. The scheme would cost ₹75,000 crore annum and has come in effect from December 2018.

The scheme was inspired Rythu Bandhu scheme proposed by the Telangana government. It is a welfare program to support farmer's investment for two crops a year by the state government. The government is providing 58.33 lakh farmers, ₹4,000 per acre per season to support the farm investment, twice a year, for rabi and kharif seasons. This is a first direct farmer investment support scheme in India, where the cash is paid directly.

Telangana and Odisha have adopted direct income support to help farmers as opposed to loan waivers. YS Jagan Mohan Reddy, chief minister of Andhra Pradesh proposed to give farmers Rs 12,500 as an investment per year. Earlier, this investment amounted to Rs 10,000. Jivikoparjan Yojna and farmer support scheme endorsed by Patnaik for welfare of the farmers proved to be a turning point during previous elections.

"Ten lakh landless households will be supported with a unit cost of Rs 12,500 to take up activities like goat rearing units, mini layer units, duckery units, fishery kits for fishermen and women, mushroom cultivation and bee keeping," said CM Patnaik.

Due to financial assistance provided by the government in previous budget, it is assumed that central government may provide special provisions for farmers in its new budget. In place of farm loan waiver these states have aided direct financial assistance to the farmers. This will help farmers to take up cultivation on their own.

Patnaik said farm loan waiver may help a section of the farmers, but this scheme will cover 92% of cultivators of the state. Also, NITI Aayog opposes farm loan waivers. It has suggested that all subsidies for agriculture would be replaced by direct income transfer.

PM Narendra Modi keeps his promise by expanding radius of Pradhan Mantri Kisan Samman Nidhi Yojna and associated all farmers with it. This scheme proposed by National Democratic Alliance (NDA) was praised by farmers as well as by the agricultural economists.

Devinder Sharma, food and trade policy analyst claimed that financial assistance of Rs 6,000 is not enough yet at least it jolted to a start. He has been constantly advocating for increasing this amount to Rs 18,000 annually.

Group chief economic advisor of State Bank of India Dr Soumya Kanti Ghosh, applauds PM Kisan Samman Nidhi Yojna in one of his research papers. He advocated for increasing financial assistance of Rs 6,000 to Rs 8,000 for next five years.

Odisha endorses Rs 1,000 to landholding farmers and Rs 12,500 to landless farmers

Under Kalia, three million households of small and marginal farmers will get Rs 10,000 in two Kharif and Rabi installments as financial assistance for five cropping seasons from 2018-19 to 2020-21. The scheme offers interest free crop loans of up to Rs 50,000 to farmers whereas this interest adds up to 7% in other states, in which, the central government offers subsidy of 3%. The scheme also offers Rs 12,500 as financial assistance to one million dalit and landless farmers for carrying agricultural households.

Direct financial assistance of Rs 12,500 in Andhra Pradesh

Andhra Pradesh Chief Minister YS Jagan Mohan Reddy keeps his promise and announces incentive worth Rs 12,500 to cultivators in order to give direct benefit to the farmers. The scheme will be launched on October 15, 2019. Reddy scrapped the previous Naidu government's Rs 10,000 'Annadata Sukhibhava' scheme and replaced it with the Rs 12,500 'Rythu Bharosa' scheme.

Telangana, first state to endorse direct benefit transfer

Telangana, officially formed on June 2, 2014, jolted a start to novel changes in farming.

Plus, it also looked after water amenities and signed up the world's largest irrigation and drinking water system -- Kaleshwaram Multipurpose Lift Irrigation Project -- was inaugurated by Telangana CM K Chandrashekhar Rao.

The project will provide water for drinking purposes to about 45 lakh acres in 20 of the 31 districts of Telangana, apart from Hyderabad and Secunderabad.

Once the project reaches its full operational capacity, it is expected to make Telangana an economic power because farmers will be able to sow two crops, and thousands of crores worth of fishing industry would flourish in the fresh water in this project alongside tourism and water sports, reported The Indian Express.

In 2018-19 Budget, the Telangana Rashtra Samithi (TRS) government announced to spend Rs 12,000 crore every year for Rythu Bandhu. It also includes Rs 5 lakh free life insurance for farmers.

The Rythu Bandhu scheme -- a farmer investment support scheme meant to give Rs. 4000 per acre to land-owning farmers for each cropping season. The major benefit of the Telangana Land Records Updation Programme, targeted at improving documentation of rural land records hailed success.

A survey was conducted to make records of lawful possession of the land. The post-survey process included allocation of new e-pattadar passbooks. This survey records claimed significant success in updating the land records possessed by the locals.

(Shivani Gupta contributed to this story)

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