The estimated cost for the whole scheme for the three-year period was earlier fixed at Rs 10,180 crore (Rs 7,540 for farmers and Rs 2,640 for labourers) and with the latest expansion, the cost could increase to about Rs 15,000 cror
By Prabhudatta Mishra
Riding on an electoral triumph which, among other things, is attributed to the Krushak Assistance for Livelihood and Income Augmentation (Kalia) scheme, the Naveen Patnaik government in Odisha has widened the ambit of the quasi universal basic income (QUBI) scheme to cover 25 lakh more families from 50 lakh at present.
The enlargement of the scheme, which analysts view as ‘progressive’ as it makes a standard payment to all beneficiaries without linkage to land holdings as in Telangana’s Rythu Bandhu scheme, will raise the scheme’s annual cost by Rs 1,250 crore to Rs 3,750 crore.
In recent elections for the state assembly held along with Parliament elections, Patnaik was voted back to power for the fifth time in a row.
According to Saurabh Garg, Odisha’s principal secretary (agriculture), the target beneficiaries of Kalia scheme will now be 50 lakh farmers (including share croppers) and 25 lakh landless labourers. So far, around 51 lakh families have received the benefit, including 8.4 lakh people who got it on Wednesday, he said.
The Election Commission had stopped the direct benefit transfer (DBT) scheme during the poll period even though it was announced in December 2018 and even disbursal of cash to beneficiary bank accounts started before before the poll schedule was announced on March 10.
Under the Kalia scheme (2019-2021), all eligible farmers/share croppers will get Rs 5,000 each before the start of each kharif and rabi season while landless each farm labourer will receive Rs 12,500 each in 3 (undefined) instalments over 3 years.
Initially, the state government had set a target to cover about 30 lakh small and marginal farmers under Kalia but over 60 lakh farmers had applied for enrollment immediately after the scheme was launched. So, the current increase in target beneficiaries was anticipated as Patnaik had promised during the elections that no farmer would be excluded from the scheme.
The estimated cost for the whole scheme for the three-year period was earlier fixed at Rs 10,180 crore (Rs 7,540 for farmers and Rs 2,640 for labourers) and with the latest expansion, the cost could increase to about Rs 15,000 crore. Of course, such schemes, once started, are difficult to be stopped and an extension beyond 2021 is a distinct possibility.
While a host of states, including Telangana, Odisha, West Bengal and Jharkhand, have rolled out cash assistance (DBT) scheme for farmers since early 2018, the Narendra Modi government came out with a pan-India PM Kisan scheme in February this year. Under the Rs 75,000-crore PM-Kisan scheme, about 12 crore small and marginal farmers (owning land up to 2 hectares) are being given Rs 6,000/year in 3 equal tranches.
Under the Telangana’s scheme, all farmers get Rs 8,000 per acre/year in two instalments just before the sowing season to help them cover input costs. Under its Mukhya Mantri Krishi Yojana, the Jharkhand government in April unveiled a scheme to pay Rs 5,000/acre every year to the state’s 22.76 lakh small and marginal farmers, at an estimated annual cost of Rs 2,250 crore.
Former chief economic adviser Arvind Subramanian wrote in FE last year, “More generally, QUBIs (quasi universal basic income) are schemes in which transfers are given to everyone who meets an easily identifiable criterion.” He, however, added that since payments to households under the Rythu Bandhu scheme (RBS) are based on farm size, they can become regressive (hence the pressures to exclude large farmers from the scheme). “In contrast, a pure UBI in which the same rupee amount is given to all households will be progressive because the effective subsidy rate (transfers as a share of household income) will be greater for the poor and decline with rising income,” he said.
Shweta Saini, senior consultant at Icrier, wrote in FE recently, “By making payments on a per acre basis, RBS is criticised for being regressive, i.e. as landholding size grew, so did the payment. As per calculations based on Telangana agri-landholdings and the RBS payout schedule, it was found that about 38% of RBS payouts went to farmers with greater than 2 hectares. Kalia is progressive as it makes a standard payment to all on just the condition that the individual is identified as a beneficiary. Besides, Kalia is only designed to deliver to small and marginal farmers, all others are outside the ambit of the scheme. Other farmers excluded from Kalia include ones paying taxes or having a government job.”