Interim Budget 2019 | ₹6,000/yr farmer support: Too little, too late, say economists

February 01, 2019 01:23 pm | Updated December 05, 2021 08:57 am IST - NEW DELHI

Greener pastures: Various initiatives such as agriculture credit are expected to boost farm income, the report said.

Greener pastures: Various initiatives such as agriculture credit are expected to boost farm income, the report said.

Farmers with small landholdings have been promised income support of ₹6,000 per year , in the biggest announcement of the NDA government’s last budget before elections.

 

Farmers owning up to two hectares of land will receive ₹6000 per year, transferred directly to their bank accounts in three instalments of ₹2000 each. According to the Finance Minister, more than 12 crore households across the country will benefit from this scheme that will be applicable from December 2018.

The scheme will be fully funded by the Central government which has allocated ₹20,000 crore in the revised estimates for the current financial year, as well as ₹75,000 crore for 2019-20.

The amount to be transferred to farmers is lower than the income support being given by the two States which already implement similar schemes: Telengana’s Rythu Bandhu scheme which gives farmers ₹10,000 per acre per year, and Odisha’s KALIA scheme, which is giving ₹10,000 per household per year to small landholders as well as landless tenant farmers.

 

Agricultural economists and farm activists say the scheme will not be enough to alleviate distress.

“This is too little, too late,” said Ashok Gulati, agricultural economist and the Infosys chair in agriculture at Indian Council for Research on International Economic Relations (ICRIER). “At ₹500 per month, it will amount to less than 1/15th of an average household’s income. Per annum, it’s peanuts.” He suggested that if the government really wanted to make a difference through an income support scheme, it should double the amount given by reducing some food and fertiliser subsidies.

“It has been done half-heartedly,” said agriculture and food policy expert Devinder Sharma. “I don’t know how you can pull farmers out of distress and prevent farmer suicides with just ₹500 per month…The government has given much bigger support to middle class through tax breaks. This is a middle-class-centric budget, not a farmer-centric budget.”

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