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LATEST NEWS UPDATES | Niti Aayog bats for direct benefit transfer to farmers -Yogima Sharma

Niti Aayog bats for direct benefit transfer to farmers -Yogima Sharma

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published Published on Jan 19, 2019   modified Modified on Jan 19, 2019
-The Economic Times

NEW DELHI: Farmers could get annual income support of Rs 15,000 per hectare if the Niti Aayog’s proposal for an upfront subsidy through direct benefit transfer is accepted, said people with knowledge of the matter.

The 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 to help alleviate agrarian distress as opposed to loan waivers that have been announced by other, mostly Congress-ruled, states. The Centre has said that such debt forgiveness doesn’t address the root cause.

The agriculture sector gets input subsidies worth over Rs 2 lakh crore every year. Based on the total cultivable area in the country, it amounts to Rs 15,000 per hectare. Some experts and policy makers contend that subsidies are not equitable or efficiently disbursed. In some cases, they have an adverse effect on natural resources and sustainability of agricultural production, they say.

A senior government official told ETthat the idea is to move to a mechanism that addresses agrarian distress, prevents the misuse of subsidised urea and power and gives economic freedom to farmers. It will also stop massive leakages such as subsidised fertiliser being diverted to other industries.

“The government is of the view that this is the only way forward to supplement the farm income,” the official said. “Besides, giving money directly to farmers would give them freedom to choose the best crop and not go only for subsidised items, be it fertiliser or free power.”

Prime Minister Narendra Modi had said in 2015 that the government wants to double farm income by 2022-23.

This needs an annual growth rate of over 10% but farm output has been lagging, resulting in declining agricultural income.

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The Economic Times, 18 January, 2019, https://economictimes.indiatimes.com/news/economy/policy/niti-aayog-bats-for-direct-benefit-transfer-to-farmers/articleshow/67581118.cms


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