There are almost 12 crore small and marginal farmer households in India, which brings the cost of this scheme to Rs 1.44 lakh crore or 0.76 percent of the projected GDP for FY19
The Modi government, set to present the last budget of its term on February 1, may announce a relief scheme for distressed farmers in the form of a cash transfer. The package could involve a transfer of Rs 12,000 annually to all small and marginal farmer households, the Financial Express reported.
The scheme could reportedly involve a flat cash transfer to all identified beneficiaries similar to Odisha's Kalia scheme, and not based on a per-acre basis like Telangana's Rythu Bandhu scheme.
There are almost 12 crore small and marginal farmer households in India, which brings the cost of this scheme to Rs 1.44 lakh crore or 0.76 percent of the projected GDP for FY19.
The government may also update the crop insurance scheme -- Pradhan Mantri Fasal Bima Yojana (PMFBY) by eliminating the requirement of farmers having to pay the premium amount. This would cost the exchequer Rs 5,000-Rs 6,000 crore. In FY18, farmers paid near Rs 4,500 crore. Farmers pay two percentage points of the 12 percent premium under this scheme. The Centre and state governments split the remaining amount among themselves.
Farmers making timely payments of their dues may get 1-2 percentage points more on interest subvention on agricultural credit, over the existing 3 percent. This move may cost the government at least Rs 6,000 crore.
The overall expenditure on the package may be Rs 1.62 lakh crore. Whether the government will fund this on its own, or with assistance from the states, is not yet clear, the report stated.
The government aimed to disburse agriculture credit worth Rs 11 lakh crore in 2018-19, which may tip over to Rs 13 lakh crore.
"The central government is likely to announce some version of direct cash support for rural India. Estimates suggest that if the government were to enact a similar direct cash transfer scheme nationwide, it may cost around Rs 2 lakh crore, 1 percent of the GDP in FY20. However, it subsumes some pre-existing schemes, and shares the cost with the states, the burden would be lower," HSBC Global Research had said in a report recently.Indian Union Budget 2019: What does the FM have up his sleeve in the run up to the General Elections? Click here for live Budget 2019 news, views, analyses and more.
