Modi government mulls Rs 10,000 per annum payment to farmers

The Narendra Modi government is contemplating several options to roll out a farm relief package as soon as possible, and the Cabinet is likely to deliberate several proposals over the next two weeks.
ET Now learns from top government sources that the Prime Minister's Office is studying the feasibility of adopting a "One Household One Incentive" policy and directly pay Rs 10,000 annually to each deserving household to purchase seeds, fertilizers and agricultural machinery.

This is the Odisha government's farm model, and the PMO is actively discussing this with the Finance Ministry, even as the the Agriculture Ministry has been instructed to collate data on this model's performance.

Telangana Model vs Odisha Model


This package, unlike the Odisha model, may not cover landless farmers as they are typically not burdened by loans. The budgetary implication could be approximately Rs 1.4 lakh crore, said a government source.

The Prime Minister announcing the mega relief package on Republic Day is a high possibility. Government sources say the PMO may even script a brand new rural package, even as it is seeking data and inputs from the relevant ministries and state governments. It could also be an ensemble/mix of models adopted by individual states.

The other option being studied very carefully at the PMO is the Telangana Model. That model promises Rs 4,000 per acre to small and marginal farmer for each kharif and rabi season. Identifying true land owners which is often fragmented among families is seen as a big negative for rolling out this scheme pan India. The financial implication at Rs 2 lakh cr is another big negative, said a senior government official.

Rural distress has been cited as one of the big reasons for BJP's rout in the three recent assembly elections of Rajasthan, Madhya Pradesh and Chattisgarh. The PMO, thus, is believed to be keen to make an announcement as soon as possible and to also implement it over the next two months.