The Prime Minister’s Office helped the state government get the required permission from the RBI to distribute cash to farmers.


The Centre has backed K. Chandrasekhar Rao led Telangana government’s scheme to distribute direct cash support to farmers at the rate of Rs 4,000 per acre for kharif crop, and has supplied around Rs 6,000 crore to banks in Telangana this week. This is being billed as the biggest disbursal of cash in the country since demonetisation of November 2016.

CM KCR had lobbied hard with the RBI for the last three months to get this much amount in the form of cash, but the central bank had refused to budge. However, intervention from the Prime Minister’s Office (PMO) and the Union agriculture ministry helped the state government to get the required clearance. As this is the first of its kind scheme in the country, in which every farmer will get cash benefit of Rs 8,000 per acre for per annum (to be distributed in two instalments for kharif and rabi crops), the Centre has evinced much interest in it.

Telangana agriculture principal secretary C. Parthasarathi was called to New Delhi by the Union agriculture ministry officials in March and a feasibility study was been commissioned by the PMO to see if it can be extended to the entire country. “However, the idea was dropped as there wasn’t enough time and sources to implement it in the whole country,” Parthasarathi told The Sunday Guardian.

KCR’s government has provided for Rs 12,000 crore in the 2018-19 Budget for this cash subsidy, officially called “Raithu Bandhu”, but the actual problem arose after the state level bankers refused to distribute such a huge amount in cash, due to restrictions imposed by the RBI.

The RBI top brass had initially expressed its inability to pump in Rs 6,000 crore in cash within a span of one week to one state as this went against the Centre’s principle to discourage cash transactions and promote digital payments. But following clearance from RBI, separate cheques were printed for all the 56 lakh farmers in the state and the bankers were asked to give money at par.

CM KCR launched the scheme in Huzurabad on Thursday and all the ministers and MLAs distributed the cheques to thousands of farmers in their respective areas. The farmers were also issued newly designed passbooks to prove their title of the lands.

Several other states, including Uttar Pradesh, Karnataka and Bihar, have evinced interest in this cash distribution to farmers at the rate of Rs 4,000 per acre and the Union agriculture ministry too has asked all the states to study its impact in Telangana.

Telangana Finance Minister Etela Rajender told this newspaper that the distribution of cash under Raithu Bandhi would continue for another week or 10 days and he thanked the RBI for ensuring that enough cash was sent to the banks. The government plans to distribute next instalment of cash—Rs 4,000 per acre—for rabi crop in September. As many as 70% of farmers in Telangana own an average landholding of two acre and only less than 1% of them own more than 20 acre each.

Many agronomists and agriculture specialists have welcomed this scheme, though they were not sure whether it would solve the agrarian crisis and end farmers’ suicides.

“We need to wait and see its impact,” said Dr Pidigam Saidaiah, Prof K. Jayashanker of Agriculture University, among others.

Opposition parties, however, dubbed it as an election stunt by KCR and said that the cash distribution of Rs 4,000 per acre would not solve the crisis in agriculture sector.

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