Agri Business

Centre may go for a freebie scheme for farmers instead of a loan waiver

G Naga Sridhar Hyderabad | Updated on January 02, 2019 Published on January 02, 2019

Talks on with banks to assess the feasibility of rolling out a ‘Rythu Bandhu-like’ programme

The Centre may prefer a freebie scheme for farmers ahead of elections, even as demands for a mega loan waiver are mounting.

The feasibility aspects of launching a scheme on the lines of Telangana’s Rythu Bandhu are , are being taken up with select banks, according to sources.

“A few banks have been asked to examine the nitty-gritty of it, though this in no way confirms any final decision,” a top executive of a public sector bank told BusinessLine.

In addition to the wide-ranging criticism, the persistent demand from the Opposition parties for loan waiver could be the reason behind the search by the Centre for alternative schemes to woo farmers in the run-up to the general elections.

Further, Rythu Bandhu is now being seen as one of the major factors that helped the Telangana Rashtra Samithi (TRS) to sweep the elections for the State legislative assembly last month.

The State Bank of India (SBI), which rolled out the scheme in Telangana with the support of other banks, feels it is possible to replicate the model across the nation.

“We have established a format now and will use it whenever necessary,” J Swaminthan, Chief General Manager, SBI, Hyderabad Circle (Telangana), told BusinessLine.

Road could be bumy

While the total budget provision for the scheme in Telengana vis ₹12,000 crore, in the second round 43.80 lakh farmers have been given ₹4,724 crore, reveal SBI data.

A national rollout of the scheme, however, is not easy.

“We need digitised land records, and pattadar passbooks should be linked with bank account numbers of the farmers,’’ Swaminathan said.

This might require support from States as well.

Meanwhile, some States have gone a few steps ahead. The West Bengal government launched the scheme last week and few others are also in the race.

Even if it not a loan waiver, direct financial assistance to farmers will also come under a form of subsidy and, thus, does not augur well for the economy as it will not create any new capacity in agricultural ecosystem.

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Published on January 02, 2019
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