Telangana’s RYTHU Bandu Scheme: Over Rs 5000 crore paid to farmers in six weeks

By: | Updated: June 25, 2018 6:16 AM

Good start to the relief scheme, seen to be more efficient and less inflationary than alternatives.

To facilitate the scheme, the Reserve Bank of India (RBI) has ensured cash availability to the extent of 95% for its requirement.

The Telangana government has disbursed a considerable sum of Rs 5,000 crore to over 47.5 lakh land-holding farmers in the state since the May 10 launch of its ambitious ‘crop investment support’ scheme Rythu Bandu. The scheme’s roaring start has borne out its higher efficiency as well as better efficacy compared with farm loan waivers and the promised MSP-based deficiency payments, when it comes to giving succour to the farming community. “Till date, of the Rs 6,000 crore allotted to banks under this programme in the first phase, some Rs 5,000 crore has been encashed by over 47.5 lakh farmers in the state,” an official source said.

While six states have since March last year unveiled loan waivers amounting to a total of Rs 1.5 lakh crore for farmers (many others seem to have similar plans), the roll-out has been partial; price-support schemes that will ensure that farmers receive the differential between the (lower) market prices and MSPs regardless of whether the government procures the crops are still on the drawing board. The Centre and states are reportedly weighing the costs of the schemes, which are seen to be prohibitive by many analysts, especially since the Modi government has promised MSPs to be at least 150% of the crop production costs.

Apart from the immediate and timely relief to farmers that Rythu Bandu allows, it is also simpler to administer, besides being far less inflationary and agnostic to the farmers’ choices of crop.

The Telangana government has set aside Rs 12,000 crore in the 2018-19 budget exclusively for the scheme, under which farmers with land titles are given Rs 8,000/acre a year by two equal pay-order cheques issued ahead of the two crop seasons.

To facilitate the scheme, the Reserve Bank of India (RBI) has ensured cash availability to the extent of 95% for its requirement. Over 59 lakh cheques were printed by eight participating banks led by State Bank of India and handed over to the state government for distribution, which in turn has handed over these to the beneficiaries over the last few weeks. What still constrain the scheme, however, are unresolved land title disputes in some areas and issues concerning forest lands.

Meanwhile, the state government has commissioned the Massachusetts Institute of Technology (MIT) to conduct an impact study on the Rythu Bandhu scheme on the farmers in the state. The study is expected to reveal how the farmers are utilising the crop investment support to increase agricultural productivity and identify lacunae in the implementation of the scheme and irregularities, if any.

Chief minister K Chandrasekhar Rao had said his government would spend Rs 12,000 crore every year under this scheme, potentially benefiting some 58 lakh farmers, with aggregate land holding of 1.42 crore acres. The first phase of the scheme for the current fiscal will be on till October-end and second phase will start from November.

The scheme’s critics, however, say it benefits rich landlords rather than “real cultivators”, citing that land holding is a prerequisite for availing the cash support.

Telangana Jana Samiti chief M Kodandaram is critical of the Rythu Bandu scheme, which he argues was helping realtors instead of farmers. “The uncultivated land is the property of realtors who use it for business purposes. We have seen people coming in swanky SUVs to take Rythu Bandhu cheques,” he said.

Credit Suisse said in a report, “As per the 2011 census, of the 9.1 million agricultural workers in Telangana, only 3.15 million were cultivators, and the rest 5.9 million were farm labourers. This (Rythu Bandu) subsidy goes to the cultivators and not the labourers. That said, given that the burden of low prices and rising costs are borne by the farmers, the distinction may not be unfair.” However, even this report noted the inequality in land holding in the state — 91% of farmers hold less than 5 acres and get only 66% of the disbursed amounts.

The state government has, therefore, appealed to the rich farmers to give up their benefit. It, sources said, is in the process of charting out a permanent road map for revamping the state’s agriculture sector through creation of crop colonies, establishment of advanced soil testing centres, godowns and cold storage facilities and adoption of new farm techniques. Ensuring remunerative prices and robust marketing networks for farm commodities are also among its policy priorities.

In fact, the Telangana government had come out with a farm loan waiver scheme in June 2014, during the election campaign phase and much before the current series of such largesse started. Government sources claim that the Rs 16,124-crore package has freed over 35 lakh farmers of their debt burden. Bankers had spoken against such schemes which could adversely affect credit discipline and, therefore, banks’ health.

“Of 2.9 crore acres in the state, about 2.3 crore acres have been verified and around 1.4 crore acres have been identified as cultivable land. Whether they take up cultivation or not, the government will issue cheques as well as passbooks to all 58 lakh eligible farmers for this season,” Rao had said. The government has distributed ‘pattadar’ passbooks among farmers which serve as a single proof of ownership. The land title documents were prepared after a comprehensive land surveys across the state.

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