One of the big-ticket announcements made by the Narendra Modi government in its interim Budget is its plan to give Rs 6,000 per year to farmers owning less than two hectares of land.
Union Railways Minister Piyush Goyal, who is officiating as the finance minister in the absence of Arun Jaitley, made this announcement while presenting the interim Budget in the Lok Sabha on Friday, 1 February.
According to Goyal, the move is likely to benefit 12 crore farmers and will cost the government Rs 75,000 crore. The scheme will be funded entirely by the Union government.
As an allocation, this is bigger than even the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). In the 2018-19 Budget, the government had allocated Rs 55,000 crore for MGNREGA.
Goyal announced that the support to farmers will be transferred to their bank accounts in three equal instalments of Rs 2,000. He said that since the policy’s implementation began on December 2018, farmers could receive the first instalment sometime soon.
He said that Rs 20,000 crore will be added to the revised estimate of the previous financial year.
The minister said that the scheme “will help farmers lead a respectable life”.
Clearly, the move is aimed at reducing the resentment among farmers in the run-up to the elections. If the government implements this effectively, the first instalment of Rs 2,000 might reach the bank accounts of 12 crore farmers anytime now. Naturally, the National Democratic Alliance’s (NDA) hope is that this would be fresh on the minds of farmers when they cast their votes less than three months from now.
However, there are two state schemes – the Rythu Bandhu scheme in Telangana and the Kalia scheme in Odisha – that give more to farmers.
Telangana’s Rythu Bandhu Scheme
The scheme, which was introduced by the K Chandrashekar Rao government in May 2018, provides Rs 4,000 per acre to each farmer in each crop season for “purchase of inputs like seeds, fertilisers, pesticides, labour and other investments.”
So if a farmer has 5 acres of land, he would get Rs 20,000 in one crop season. Since most farmers have two-crop cycles every year, a farmer with 5 acres of land would get Rs 40,000 per year under Rythu Bandhu.
The Telangana government claims to have provided Rs 12,000 crore under the scheme in the 2018-19 financial year. According to reports, the number of farmers who benefitted from it is 58.33 lakh. This means that the Telangana government spent approximately Rs 20,572 per farmer under Rythu Bandhu in 2018-19.
In comparison, the NDA has promised Rs 75,000 crore for 12 crore farmers, which comes to Rs 6,250 per farmer. This is less than one-third of the expenditure per farmer under Rythu Bandhu.
The main drawback of Rythu Bandhu, however, is that it doesn’t cover tenant farmers.
KALIA Scheme In Odisha
Some of the shortcomings of Rythu Bandhu were addressed by the Krushak Assistance for Livelihood and Income Augmentation or KALIA scheme that was recently launched by the Odisha government.
The scheme provides assistance of Rs 10,000 per family – Rs 5,000 each in the Rabi and Kharif crop seasons.
Chief Minister Naveen Patnaik claims that the scheme will cover 92 percent of the cultivators – landowners as well as tenants.
Unlike Telangana, the scheme isn’t linked to the amount of land owned. Therefore the Centre’s scheme is more similar to KALIA than Rythu Bandhu.
However, the amount provided under KALIA is more than what is being promised by the NDA government.
In addition to the Rs 10,000 per year, KALIA also includes a life insurance cover of Rs 2 lakh and additional personal accident coverage of the same amount for 57 lakh households. Crop loans up to Rs 50,000 are interest-free.
The scheme also aims to support 10 lakh landless families, specifically those belonging to Scheduled Castes and Scheduled Tribes, with a support of Rs 12,500 for activities like cattle-rearing, poultry farming and fisheries.
Too Little, Too Late
The NDA government’s promise is far less than what is being provided under the Rythu Bandhu and KALIA schemes in Telangana and Odisha respectively. Farm activist Ramandeep Singh Mann described the government’s Rs 6,000 per year promise as a “lollipop”. According to his calculation, it amounts to Rs 16.5 per day, which is unlikely to help resolve the agrarian crisis.
Rashtriya Lok Dal leader Jayant Chaudhary said that India’s farmers deserve much more than what the government has given and that such a Budget should have been presented on 1 April (April Fool’s Day) and not 1 February.
Congress leader Shashi Tharoor said that the promise was a damp squib and won’t help in restoring the dignity of farmers.
At a time when state governments are preparing much more targeted schemes or announcing loan waivers to help farmers, the government’s promise is unlikely to make any major difference. But in terms of electoral impact, it remains to be seen if the first instalment of Rs 2,000 in March, would help the NDA win votes in the Lok Sabha elections.
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