After electoral debacle in three major States — Chhattisgarh, Madhya Pradesh and Rajasthan — in the just- concluded Assembly polls, the Narendra Modi Government is considering several measures to support farmers in distress as pressure mounts for a nationwide loan waiver scheme ahead of the general election.
These include a scheme to direct income support to farmers for the purchase of inputs like seeds, fertilisers, pesticides, labour and other investments in the field operations of farmer’s choice for the crop season across the country, to pay farmers the difference between the Minimum Support Price (MSP) for their crop and the market rate, doubling collateral-free loans under Kisan Credit Cards (KCCs) to Rs 2 lakh and changes in the Pradhan Mantri Fasal Bima Yojna (PMFBY) crop insurance scheme to enhance coverage and ensure faster settlement of claims and schemes. The Centre is examining the Rythu Bandhu Investment Support Scheme (FISS) of Telangana for farmers to tackle the agrarian crisis and farmers’ unrest.
A high-level meeting was held by Prime Minister Narendra Modi at his residence on Wednesday on a wide-ranging farm relief plan. Finance Minister Arun Jaitley, BJP chief Amit Shah, and Agriculture Minister Radha Mohan Singh too attended the meeting.
“The Modi Government will announce a new set of measures for farmers before the end of the winter session (of Parliament) on January 5,” said the sources.
Sources said the Central Government’s plan is to go beyond loan waivers. Under the direct income support scheme, farmers would be entitled to a periodic payment. The amount will be paid on the monthly basis to carry out farming activities. Under the scheme, there is a possibility that an amount of Rs 2,000-2,500 per farmer per month to be provided directly to their bank account. If implemented, the scheme will benefit 10-12 crore farmers in the country.
One step being considered is to pay farmers the difference between the Minimum Support Price for their crop and the market rate. The price differential could be credited directly to the banks of the farmers. The idea is inspired by the "bhavantar (price difference) scheme" of the previous Shivraj Singh Chouhan-led BJP Government in Madhya Pradesh.
The third step being considered is to doubling collateral-free loans under Kisan Credit Cards (KCCs) to Rs 2 lakh and changes in the Pradhan Mantri Fasal Bima Yojna (PMFBY) crop insurance scheme to enhance coverage and ensure faster settlement of claims and schemes. There are over 40 million KCC accounts with Rs 2.37 lakh crore outstanding. Under KCC guidelines, the Reserve Bank of India has allowed banks to waive margin requirements for loans up to Rs 1 lakh. Farmers currently have to repay both principal and interest to be eligible for fresh lending.
Sources said that the Centre is also examining the Rythu Bandhu Investment Support Scheme (FISS) of Telangana for farmers to tackle the agrarian crisis and farmers' unrest. Aimed at relieving farmers of debt burden and cease them from falling into the debt trap again, the scheme provides a grant of Rs 4,000 per acre per farmer each season for the purchase of inputs like seeds, fertilisers, pesticides, labour and other investments in the field operations of farmer's choice for the crop season. A high-level team of Central Government has recently visited the Telangana to study the scheme and submitted their report to Prime Minster Office (PMO).
The Jharkhand Government has also recently announced a scheme called as the Mukhyamantri Krishi Ashirwad Yojana. Under the scheme, the Government will give Rs 5,000 per acre to farmers. Farmers who have land holdings of less than one acre will be entitled to avail of assistance of Rs 5,000.
To boost farm sector, the Modi Government had launched Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) which is indicating less effective. The new minimum support price (MSP) for kharif and rabi crops that provides a cost-plus-50 per cent price also seems to be less effective. Despite announcing several sops for farmers, the Government has failed to capture agrarian crisis and farmers' unrest.
The results of the recent Assembly polls indicated that farm distress would be a core issue in the 2019 polls. The Congress made good on its campaign promise to waive farm loans almost immediately after taking charge in the three States. Congress chief Rahul Gandhi then told the media that his party and others would not let PM Modi sleep or rest until an all-India loan waiver scheme was announced.