Rythu Bandhu scheme: Telangana’s answer to end farm woes, boost economy – all you need to know

By: | Updated: June 25, 2018 4:25 PM

Rythu Bandhu scheme: Within six weeks, the government of Telangana has distributed Rs 5000 to over 47.5 lakh land-holding farmers of the state.

rythu bandhu scheme kcrRythu Bandhu scheme is being seen as a political masterstroke by Telangana CM KCR. (Source: Government of Telangana)

Rythu Bandhu scheme: Within six weeks, the government of Telangana has distributed Rs 5000 crore to over 47.5 lakh land-holding farmers of the state. The programme launched on May 10 is basically a “crop investment support” scheme. A year ahead of the Lok Sabha and Assembly elections in Telangana, the scheme is being seen by analysts as a “masterstroke” that will help the ruling K Chandrasekhar Rao-led TRS party comfortably beat the Opposition.

At a time when the Central government led by Prime Minister Narendra Modi is promising to double farmers’ income by 2022, Telangana government’s popular scheme needs to be seen closely for its simple and efficient features. Moreover, when demand for farm loan waivers get regularly made across several states, and with examples like Uttar Pradesh where such steps have failed to please all farmers, the impact of the Rythu Bandhu scheme is remarkable in view of the minimal criticism that it has faced since its launch.

The Financial Express reported earlier citing an official source from the Telangana government as saying that Rs 5000 crore of Rs 6000 crore has been encashed by over 47.5 lakh farmers of the state within 6 weeks of the launch of the scheme.

What is Rythu Bandhu scheme?

Rythu Bandhu scheme aims at farmer’s empowerment. It is also India’s “first ever farmer investment support” scheme. Some of the key features of the scheme include:

  • Grant of Rs 8000 per acre to all Telangana farmers with land titles every year, i.e. Rs 4000 per crop season.
  • The money is disbursed by two equal pay-order cheques issued ahead of the two crop seasons.
  • Telangana government allocated Rs 12000 crore in the current budget for the scheme.
  • The scheme aims to benefit around 58 lakh farmers of Telangana.
  • Under the scheme, there is no upper limit of land holding for farmers to avail benefit of the scheme.
  • The scheme is expected to benefit around 1.42 crore acre land of the state.
  • As part the scheme, the state government also offers ‘Pattadar Dharani’ passbooks to every farmer. The passbooks assist in identifying ownership of the land, and replace all other farm ownership documents.
    All payments are done via bank accounts.

Rythu Bandhu Scheme vs Loan Waivers, crop compensation

There are at least two popular ways in which the government tries to compensate farmers. First, through loan waivers to loss-making farmers. Second, through ensuring Minimum Support Price support for major crops. In the Union Budget this year, the Centre promised MSP to farmers at 1.5 times the cost of production of the crop. However, farmers in many parts of the country are yet to realise this promise.

Several Indian states have announced farm loan waivers worth around Rs 1.5 lakh crore since March last year. However, the rollout of loan waivers were partial in many states. This is so because the loan waiver schemes have tried to address only a certain class of farmers, not all.

Reports say the government is still mulling over compensating farmers the difference of the (lower) market prices and MSPs irrespective of whether the administration buys the products or not.

As compared to loan waivers and partial compensation being mulled by the Modi government, Rythu Bandhu scheme is simpler to administer and also less inflationary to the farmer’s choice of crops.

Criticism

One of the criticisms against the Rythu Bandhu scheme is that it benefits rich landlords instead of “real cultivators” as land-holding is a pre-requisite for getting benefit of the scheme.

Telangana government had previously appealed to rich farmers to give up benefits of the scheme. A survey by a US-based firm reported by The Hindu on June 23 says that majority of farmers judiciously used the money they received under the scheme. The bulk of the cash was used for procuring fertilizer, pesticides and other farm inputs.

PM Modi a fan?

Telangana government’s scheme has even drawn the attention of Prime Minister Narendra Modi. Media reported sources as saying early this month that PM Modi had inquired about the implementation of the scheme. A discussion on the matter reportedly took place during the recent meeting of PM Modi and Telangana Governor ESL Narasimhan in New Delhi.

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