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Lessons in direct income support from Odisha -Varad Pande and Shilpa Kumar

-The Indian Express

Governments can learn much on how to construct a social welfare system for farmers from Odisha's KALIA scheme for DIS.

The recent farmer agitation has brought the issue of farmer distress front and centre in the public consciousness. The time seems ripe to find new solutions to the structural challenges facing farmers. One promising step is the shift from non-targeted agriculture subsidies towards direct income support (DIS). A key question has been on “targeting”, that is, whether one can reach the intended beneficiaries in a cost-effective manner through DIS.

Over the last few years, several DIS programmes have been launched with states leading the charge: Telangana’s Rythu Bandhu and Odisha’s KALIA schemes being two examples, followed by the Centre’s PM-KISAN.

Odisha’s KALIA scheme offers some important lessons for DIS schemes everywhere. Under its first phase, Rs 2,500 crore was given as DIS to 51 lakh farmers, in a four-month period. Odisha used a three-step framework, called “Unification-Verification-Exclusion”, to identify beneficiaries. The first step involved unifying state databases with “green forms” which were essentially applications from farmers who wanted to opt in. Together, this led to the creation of a list of 1.2 crore applicants. The second step involved verification of information through databases like the Socio-Economic Caste Census, National Food Security Act and other databases; de-duplication through Aadhaar; and bank account verification through bank databases. The third step involved excluding ineligible applicants like government employees, tax payers, large farmers, and those that voluntarily opted out.

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