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LATEST NEWS UPDATES | Rythu Bandhu scheme: Is RBS a panacea to loan waivers? -Kushankur Dey

Rythu Bandhu scheme: Is RBS a panacea to loan waivers? -Kushankur Dey

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published Published on Jan 19, 2019   modified Modified on Jan 19, 2019
-Financial Express

With the 2019 Lok Sabha elections approaching, the government plans to offer a stimulus package in the form of agricultural investment support scheme and group insurance to farmers, which could otherwise subsume the fumes of the farm loan waiver burden.

Can the government consider Telangana’s Rythu Bandhu Scheme (RBS) on a scaled down version? RBS has a grant component of Rs 4,000 per acre per farmer for one season (kharif/rabi). So, in a year, an eligible farmer will receive Rs 8,000 of grant for crop production that includes purchasing of critical inputs, irrigation and hiring of farm labour. The fiscal burden of the scheme can strain the Centre to the tune of Rs 600-700 billion per year, and the Telangana government has allocated about Rs 120 billion to target 5.83 million farmers under RBS in 2018-19.

The scheme ostensibly spells out farmers, who have land records, are to be covered for intended benefits. As tenant farmers are not be able to furnish land records, they will be left aside and their tyranny will continue. Therefore, there should be some alternative mechanism to cover tenant farmers. Further, RBS has some shortcomings that need to be addressed.

First, identification of the ‘right’ beneficiary could be a daunting task to roll out the scheme, as 90-110 million smallholder farmers in India have joint land records or they are yet to digitise their land records on a centralised land revenue management information system. So, land record modernisation across India, especially in eastern and north-east regions, entails a huge spending on account of state governments.

Second, monitoring of the scheme needs a fool-proof execution plan. Since agriculture is a state subject, implementing states for RBS need to come out with an execution plan. Checks and balances should plug the loopholes on whether the beneficiaries actually use the grant amount for cultivation or divert the funds to other activities? Although RBS is viewed as quasi-universal basic income (QUBI) support to farmers, the grant support is targeted for investment support in agriculture. Unless farmers’ produce is not covered under the price support scheme or fetched a reasonable market price, RBS cannot be seen as QUBI support on social and agriculture policy template.

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Financial Express, 18 January, 2019, https://www.financialexpress.com/opinion/rythu-bandhu-scheme-is-rbs-a-panacea-to-loan-waivers/1447157/


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