Acche din for farmers: Modi government to announce direct transfer of Rs 4,000 per acre, 0% interest crop loan

The Center is likely to announce Direct Benefit Transfers (DBT) worth Rs 4,000 per acre per season plus interest-free loans of up to Rs 1 lakh per farmer in instant double relief for farmers, have informed sources told BusinessToday. in.

The initiatives will cost the Center Rs 2 lakh crore towards DBT and another Rs 28,000-30,000 crore towards interest subsidy, adding up to nearly Rs 2.3 lakh crore on an annual basis. At least the fertilizer subsidy program of Rs 70,000 will be integrated into the program to make it possible. Some other smaller schemes can also be subsumed.

After losing three crucial state elections to the rival Congress in December, the ruling Bharatiya Janata party is in a rush to appease the most aggrieved community, the farmers. The party believes that the impact of the program must be felt by the intended beneficiaries well before the 2019 general election to deliver the political dividend it seeks – a return to power.

The Center has convened snap meetings at the PMO as well as NITI Aayog to finalize the announcement which is expected to take place this week. In this process, officials from the nodal Ministries of Agriculture, Revenue, Expenditure, Chemicals and Fertilizers, Food were invited to meet informally to iron out any issues.

Facility officials say there are instructions to find an out-of-the-box solution to farmers’ plight. Politically, the issue is becoming a hot potato after Congress President Rahul Gandhi threw his weight behind agricultural debt relief to lure farmers’ votes into his party’s fold.

The DBT will be granted at the rate of Rs 4,000 per acre per season for cultivation while the zero interest loan will be at the rate of Rs 50,000 per hectare capped at Rs 1 lakh per farmer, sources say. The crop loan is already available to farmers at a subsidized rate of only 4%. Under this scheme, banks will not charge any interest up to Rs 1 lakh loan.

The Center had set an agricultural loan disbursement target of Rs 10 lakh crore in 2017-2018, which was achieved. Of this amount, 70% is disbursed for agricultural loans. But with the whiff of a series of loan waivers, many banks have stopped giving loans to farmers.

Meanwhile, the DBT will allow the government to transfer subsidies directly to farmers instead of channeling them through manufacturers and traders.

This is how the DBT will work

At the time of sale of agricultural inputs, details of the buyer, his Aadhaar, quantity, land records, etc. would be captured using a point-of-sale machine. The Center will transfer profits with a cap of Rs 4,000 per acre per season.

DBT for fertilizers has already started in earnest in several states this year. The Center has also allocated Rs 70,000 crore for fertilizer subsidy. DBT works differently today, with a limited but central role for manufacturers. With this, we will succeed in ending the theft and also reach the real beneficiary, a senior official said.

The program’s biggest drawback, however, is that it still won’t cover the entire universe of potential beneficiaries. That’s what we’re discussing, an official said.

In addition to fighting against this, the Center is also required to involve the States. After all, agriculture is a matter of state, and provincial governments provide a range of benefits. Yet there are few takers among states to share the burden in the 70:30 ratio as proposed by the Center. States would prefer that the entire burden be borne by the Centre.

The ability of the BJP/NDA to turn the tide with the program will depend on how quickly its impact is felt by the beneficiaries. The proof of the pudding is in eating. But time flies.