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The government of Telangana has deposited ₹7,411.52 crore into the bank accounts of 62.99 lakh farmers in the state so far under the <keyword id="6423211" type="General" weightage="100" keywordseo="rythu-bandhu" source="Orion">Rythu Bandhu</keyword> scheme for the coming Rabi season. The investment support under the state's flagship scheme will cover 1,48,23,000 acres across the state, said Agriculture Minister <keyword id="11983590" type="General" weightage="20" keywordseo="s-niranjan-reddy" source="Orion">S. Niranjan Reddy</keyword>. Among the districts, Nalgonda received the highest assistance of ₹601.74 crore, benefitting 4,69,696 farmers. <keyword id="8596137" type="General" weightage="20" keywordseo="medchal-malkajgiri" source="Orion">Medchal Malkajgiri</keyword> district adjoining Hyderabad received the least assistance of ₹33.65 crore. The amount was deposited in the accounts of 33,452 farmers. Under Rythu Bandhu, the government credits ₹5,000 per acre into the farmers' bank accounts before the beginning of every crop season. For the Rabi season, the disbursement target is ₹7,646 crore. The authorities began depositing the amount in the farmers' accounts in the last week of December. When the scheme was launched in 2018, the state government was providing ₹8,000 per acre per year (for both Rabi and Kharif seasons). The amount was enhanced to ₹10,000 from 2019. On January 10, the cumulative assistance provided under the scheme touched the ₹50,000 crore mark. <keyword id="180385" type="General" weightage="20" keywordseo="niranjan-reddy" source="Orion">Niranjan Reddy</keyword> said Rythu Bandhu, the brainchild of Chief Minister <keyword id="11934689" type="General" weightage="20" keywordseo="k-chandrasekhar-rao" source="Orion">K. Chandrasekhar Rao</keyword>, is proving a boon for farmers and it has helped transform agriculture in the state. He claimed that no other state in the country is implementing such a scheme for the welfare of farmers. He demanded that the Central government announce a national policy for the welfare of farmers. Stating that farmers were facing a lot of problems due to shortage of farm labourers, Niranjan Reddy reiterated the demand that the Central government should link National Rural Employment Guarantee Scheme (NREGS) with the agriculture sector. He said the state governments should fix the Minimum Support Price (MSP) considering the crop cultivation and other factors in their respective regions and the Centre should procure the entire produce at MSP. He said it was unfortunate that the Centre was doing nothing except declaring MSP and demanded the Union government to implement recommendations of the Swaminathan Committee. "The Centre should bring a change in its approach towards agriculture as 60 per cent of the country's population is dependent on this sector," he said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/defense/news/india-successfully-test-fires-new-version-of-brahmos-missile/articleshow/89016230.cms">India successfully test fires new version of Brahmos missile</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/cesl-launches-biggest-ever-tender-worth-5500-crore-for-5580-electric-buses/articleshow/89016097.cms">CESL launches biggest ever tender worth ₹5,500 crore for 5,580 electric buses</a>

Rythu Bandhu scheme - Telangana government deposits ₹7,400 crore into the bank accounts of 62 lakh farmers

<ul><li>The <keyword id="6354642" type="PERSON" weightage="20" keywordseo="Modi">Modi</keyword> administration is said to be planning a direct cash transfer scheme for <keyword id="45092" type="COMPANY" weightage="20" keywordseo="farmers">farmers</keyword> as opposed to subsidies. </li><li>The government-owned State Bank of India (SBI) has supported the proposal, saying that it can be cash neutral once the government winds down its <keyword id="6354916" type="DEFINITION" weightage="20" keywordseo="Subsidy">subsidy</keyword> and insurance support schemes. </li><li>However, the scheme can only be unconditional in the short-term as the central government doesn’t have the resources or legal infrastructure in place to ascertain landholding size. </li></ul>Earlier this week, <a href="https://www.bloombergquint.com/union-budget-2019/india-said-to-mull-switch-to-cash-payments-scrap-farm-subsidies#gs.t3w2UQPU">news reports</a> emerged that the Modi administration was planning a direct cash transfer to farmers as opposed to subsidies. The reports lent further credence to the fact that the Indian government had decided against another series of loan waivers in its upcoming interim <keyword id="6358021" type="ORGANIZATION" weightage="20" keywordseo="budget">Budget</keyword>, opting <a href="https://www.businessinsider.in/interest-free-loans-and-income-support-the-upcoming-budget-may-be-a-song-for-indias-farmers/articleshow/67538156.cms">for income support and interest-free loans</a> instead after assessing the state of its fiscal deficit. The annual cost of the cash transfer programme, excluding implementation costs, is pegged at ₹700 billion. In fact, the government is reportedly planning to fund these direct cash transfers by winding down its farmer subsidy programmes, which includes its fertilizer aid scheme. Yesterday, the government-owned State Bank of India (SBI), India’s largest bank, put out <a href="https://www.sbi.co.in/portal/web/about-us/research-desk">a report</a> batting for the direct cash transfer proposal, a move that was also supported by IMF Chief Economist Gita Gopinath. The total allocation to the subsidy and insurance support schemes in the 2018-2019 was around ₹981 billion, which is 2.9% of India’s GDP. Doing away with subsidies would free up an ample amount of funding for the cash transfer scheme, according to the SBI report. As per SBI’s calculations, a beneficiary of the government’s current farmer subsidy schemes receives a cash payment in the range of ₹5,335 and ₹10,162 on an annual basis. Hence, using a rough estimate of 100 million beneficiaries, the budgetary allocation to the cash transfer scheme would have to be around ₹1- ₹1.2 trillion - at an average individual payment ₹10,000- ₹12,000 - to ensure the exercise doesn’t add to the government’s existing financial burden. Additionally, the report pointed out that an unconditional direct cash transfer scheme would be more viable than a Universal Basic <keyword id="47201" type="COMPANY" weightage="20" keywordseo="income">Income</keyword> (UBI) or a conditional transfer scheme like <keyword id="68884" type="LOCATION" weightage="20" keywordseo="Telangana">Telangana</keyword>’s Rythu Bandhu. Under that scheme, the government of Telangana provides smallholder farmers a handout of ₹4,000 per acre on an annual basis for investment in two crops. However, that hinges on the digitisation of land data in several states like Bihar, Tamil Nadu and Jharkhand. The central government doesn’t have the on-ground resources in place to adequately identify beneficiaries and verify their landholdings. That makes an <keyword id="1690909" type="PERSON" weightage="20" keywordseo="unconditional-cash-transfer">unconditional cash transfer</keyword> programme is more realistic in the short-term. SEE ALSO: <a href="https://www.businessinsider.in/interest-free-loans-and-income-support-the-upcoming-budget-may-be-a-song-for-indias-farmers/articleshow/67538156.cms">Interest-free loans and income support— the upcoming Budget may be a song for India’s farmers</a> <a href="https://www.businessinsider.in/politically-driven-financially-unsound-the-loan-waivers-offered-by-indias-political-parties-will-only-serve-to-worsen-the-countrys-bad-loan-crisis/articleshow/67190737.cms">Politically driven, financially unsound: The loan waivers offered by India’s political parties will only serve to worsen the country’s bad loan crisis</a>

India’s largest bank bats for the government’s proposed cash handouts to farmers but says they must be unconditional

<ul><li><keyword id="6357961" type="LOCATION" weightage="20" keywordseo="odisha">Odisha</keyword> has unveiled its own unconditional direct benefit transfer (<keyword id="281010" type="ORGANIZATION" weightage="20" keywordseo="DBT">DBT</keyword>) scheme that will give all of its state farmers ₹20,000 a year. </li><li>The launch of <keyword id="272930" type="COMPANY" weightage="20" keywordseo="Kalia">KALIA</keyword> preempts a likely budget announcement by <keyword id="6354642" type="PERSON" weightage="20" keywordseo="Modi">Modi</keyword> administration, which is planning a similar nationwide scheme. </li><li>The first phase of the programme will see transfers of ₹5,000 each to as many as 1.25 million beneficiaries.</li></ul>The state government of Odisha unveiled its own direct benefit transfer (DBT) scheme that will give all of its state farmers-- without any sort of filter-- ₹20,000 a year. The announcement from chief minister Naveen Patnaik preempts a likely budget announcement by Modi administration, which is said to be planning a similar DBT scheme of its own in the run-up to national <keyword id="6355644" type="DEFINITION" weightage="20" keywordseo="elections">elections</keyword>. 
 <div type="image" title="Kalia Ad" msid="67720045" hostid="261"></div>



 Handouts under the KALIA scheme, which stands for Krushak Assistance for Livelihood Income Augmentation, have commenced in <a href="https://www.business-standard.com/article/pti-stories/patnaik-distributes-benefits-to-farmer-under-kalia-scheme-119012700465_1.html">Ganjam</a>, the home constituency of Naveen Patnaik - the chief minister of Odisha. <keyword id="37885" type="ORGANIZATION" weightage="20" keywordseo="Cash">Cash</keyword> is being transferred electronically to eligible farmers through their bank accounts to enable investment in the rabi cropping season. Around 92% of the state’s farmers - from sharecroppers to large-holding farmers - are eligible, according to the state government. While the scheme is unconditional, which means a beneficiary’s land holdings has no bearing on his/her eligibility, landless households will be given special privileges under the programme such as payments of ₹12,500 for poultry farming and goat rearing, for instance. Electronic transfers would mean that only farmers with bank accounts -- or those with access to any other formal institutions -- will enjoy the benefit of the cash transfer scheme. The proportion of households where at least one member was reported to have saved any money with a formal institution in the state of Odisha <a href="https://www.nabard.org/auth/writereaddata/tender/1608180417NABARD-Repo-16_Web_P.pdf">was 71% in 2016-17</a>, according to a survey by the National Bank for Agriculture and Rural Development (NABARD). The national average was 48% at the time. The first phase of the programme will see transfers of ₹5,000 each to as many as 1.25 million beneficiaries. They will receive handouts twice a year - during the rabi and kharif seasons - in addition to a ₹10,000 payment upfront. They will also receive insurance support and access to interest-free loans. In an SBI report, S K Ghosh, the bank’s chief economic advisor, also <a href="https://www.businessinsider.in/indias-largest-bank-bats-or-the-governments-proposed-cash-handouts-to-farmers-but-says-they-must-be-unconditional/articleshow/67652841.cms">recommended an unconditional transfer programme</a>, at least in the short term. A majority of India’s rural population does not own land. Even for those who own land, many states have not digitised land records fully. All of this makes the categorisation of farmers based on the size of their land holdings extremely difficult. And Odisha’s scheme is not the first. Telangana operates its Rythu Bandhu scheme, under which the state government provides smallholder farmers a handout of ₹4,000 per acre on an annual basis for investment in two crops. However, KALIA stands out because it is unconditional and therefore, will reach more farmers and yield better results politically. If the Modi government does plan to unveil direct cash transfers at the national level on friday, he has two designs to choose from and one of them is more politically savvy than the other. Overall, Odisha’s move is well-timed. State elections for Odisha happen alongside national elections. The incumbent government, which is led by the Biju Janata Dal, has criticised the BJP and Congress’s promises for loan waivers in the state. By kicking off direct cash transfers, Patnaik has not only given himself a head start, he has also stolen at least part of the thunder that from his political rivals. SEE ALSO: <a href="https://www.businessinsider.in/interest-free-loans-and-income-support-the-upcoming-budget-may-be-a-song-for-indias-farmers/articleshow/67538156.cms">Interest-free loans and income support— the upcoming Budget may be a song for India’s farmers</a> <a href="https://www.businessinsider.in/indias-largest-bank-bats-or-the-governments-proposed-cash-handouts-to-farmers-but-says-they-must-be-unconditional/articleshow/67652841.cms">India’s largest bank bats for the government’s proposed cash handouts to farmers but says they must be unconditional</a>

Here’s what Modi government can learn from Odisha’s direct cash transfer scheme

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Rythu Bandhu scheme - Telangana government deposits ₹7,400 crore into the bank accounts of 62 lakh farmers

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India’s largest bank bats for the government’s proposed cash handouts to farmers but says they must be unconditional

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Here’s what Modi government can learn from Odisha’s direct cash transfer scheme

Dilsher Dhillon

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