Monthly Archives: May 2020

Prime Minister Narendra Modi announced that his government’s relief and recovery plan is Rs 20 lakh crore, or nearly 10% of India’s GDP. Most experts hailed this bold move. But when the finance minister unraveled the package, sector by sector, many wondered where the “new liquidity” lay. It didn’t take long to realize that the additional lean and revival of the system is only about 1% of GDP, not 10%. Much of the rest goes to increase cash flow, defer some loan repayments, etc., but not a lot of extra money.

The government has been stingy with cash payments, likely because government tax revenues are dwindling and it is reluctant to print more money for fear of being downgraded by rating agencies. Even the most affected migrant workers do not receive much cash assistance. Farmers, too, have suffered losses as a result of falling agricultural prices, especially for perishables. Onions and tomatoes, for example, sell for around Rs 6 / kg in the largest Indian mandis like Lasalgaon, Chittoor or Kolar. This is against their cost of around Rs 10 / kg. This has been the case with farmers who grow flowers, grapes and even milk in most places. The only thing the government did was to levy Rs 2,000 per farming family under the PM-KISAN program, which was initiated in all cases.

It is in this context that the government of Chhattisgarh deserves compliments for launching Rajiv Gandhi Kisan Nyay Yojna, an income transfer program of $ 10,000 / acre for rice farmers and Rs 13,000 / acre for producers. of sugar cane. Chief Minister Bhupesh Bhagel said it would also be granted to farmers of other crops and would in fact be extended to landless workers as well. We will have to wait and see how this plays out, but at first glance it will help put money directly into the hands of poor farmers and farm workers.

Bhupesh Bhagel is not the first head of state to move in this direction. In fact, during the 2018-19 Kharif season, Telangana CM K Chandrashekar Rao (KCR) was the first to implement an income transfer program of Rs 4,000 / acre, per season – this amount was increased to Rs 5,000 / acre, per season, from the 2019-20 kharif season. There is a live portal for the 2020 season that gives details about the program and its progress. During the 2018-19 rabi season, Odisha launched the KALIA (Krushak Assistance for Livelihood and Income Augmentation) program on a somewhat similar model, as did West Bengal with Krishak Bandhu in January 2019, and Jharkhand with Mukhya Mantri Krishi Aashirwad Yojana. All of these income support programs were launched just before the elections for obvious reasons, and they also prompted the Center to announce PM-Kisan support of Rs 6,000 per farming family.

This proliferation of income support policies is welcome. But, it is high time now to distill them with a view to drawing important lessons from them and, in light of this, to refine / merge these diagrams so that they perform their function in an efficient and inclusive manner without too much leakage. .

The first question is whether this income support is given to the owner-farmer or the sharecropper who actually plows the land. Ideally, it should go to the real tiller. But, the problem is that in large cases, there is no rental record. Government data shows only 10% rental in the country while several studies at the micro level indicate it could be between 25 and 30%. In fact, in many areas, like the Godavari belt, it could even exceed 50%. It doesn’t make much sense to put money in the accounts of absent owners. The best way would be to change lease laws and open up land lease markets, ensuring that the landowner has the full right to take back his land after the lease period expires. The current law, favoring “the land to the plowman”, is challenged against the owner. As a result, much of the rental in the country remains oral.

In the absence of this legal change in land lease laws, the only way forward is to fully inform the plowman that the landlord has obtained this income support and to appeal to the landowner to pass it on. this advantage over the plowman or adjusts it. in its land rental. The more information and persuasion through massive campaigns on the radio, in newspapers, etc., the better the chances that the profits will be passed on to the real ploughmen, or at least help the tenants to negotiate the terms of the lease.

The other problem is that of identifying landless workers working on farms. The majority of them are temporary and seasonal workers, which can open the door to significant leakage and corruption if their identification is left to the Patwaris or even the Panchayats. In the past, there has been talk of aligning MGNREGA with farms to contain the cost of farming, as well as to ensure that MGNREGA workers do useful and productive work. The MGNREGA legal framework allows this in the farms of SC / ST and marginal farmers.

The moot point is that now is the time to seriously think about merging income support schemes like PM-KISAN at the Central and State level, as well as MGNREGA on the one hand, and price subsidy schemes. such as food and fertilizer subsidies at the Center and electricity subsidy at the state level. Together these will amount to around Rs 5 lakh crore, an amount sufficient to start basic income coverage for poor households and then let the markets operate freely. With this holistic approach, they can cover landless workers, farmers and poor consumers, as all these categories overlap.

That there be a group of experts to take a close look at how each of these various programs works and create a comprehensive framework program to care for the poor and needy. Is the Modi government moving towards direct cash transfers?

Infosys Chair, Professor of Agriculture, ICRIER
Views are personal

This was the first installment of a 5,750 crore rupee program for farmers planting 14 types of crops. The program was inaugurated by videoconference on the occasion of the anniversary of the death of former Prime Minister Rajiv Gandhi, in the presence of Congress President Sonia Gandhi, Chief Minister Bhupesh Baghel and former President of the Rahul Gandhi Congress, at the Baghel Residence office.

The program aims to ensure the availability of a minimum income to farmers who cultivate a rabi countryside and 13 kharif crops in the state. It is similar to the Nyuntam Aay Yojana (NYAY) which was proposed by Rahul Gandhi in the latest Lok Sabha polls.

Commenting on the program, Rahul Gandhi said the state government had “set an example for the whole country on how to help people in times of crisis”.

“I had asked the Prime Minister to provide financial assistance to the poor instead of loans, because they now need money more than credit. Chhattisgarh is the first state in the country to transfer financial aid directly to farmers’ accounts. We all know that the economic situation in the state is not very good, but the government of Chhattisgarh still decided to bring relief to the farmers, ”he said.

“It is not the decision of one person, it is rather the voice of Chhattisgarh. The people of Chhattisgarh have expressed their needs and guided us towards this decision,” Rahul Gandhi added.
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“जो कहा- सो किया”

माननीय सोनिया गांधी जी एवं माननीय राहुल गांधी जी आज करेंगे “राजीव गांधी किसान न्याय योजना” का शुभारंभ pic.twitter.com/Gs1a4vbueX

– Bhupesh Baghel (@bhupeshbaghel) May 21, 2020

Congress President Sonia Gandhi said: “In line with the vision of the late Shri Rajiv Gandhi, the government of Chhattisgarh has taken a big step forward in supporting the poor, tribal people and farmers. The decision to include rural landless workers in the second phase of the program is laudable. The implementation of such programs at ground level for the benefit of every person will be a true tribute to the late Shri Rajiv Gandhi, as he believed that agriculture is the foundation of development.

The Congressional government has already transferred nearly 40,700 crore rupees to farmers’ accounts as payment against purchase of paddy, loan exemption, crop insurance claim, tax exemption of irrigation and premium. The government promised the rice farmer a sum of Rs 2,500 per quintal last year, which is Rs 1,300 more than the central government price.

“Looking at the Covid-19 crisis, we decided to pay for sugar cane, corn and other crops as well. A trade subsidy of Rs 13,000 per acre will be provided for the cultivation of sugar cane and of Rs 10,000 per acre for the cultivation of paddy, ”said a senior state government official.

He added: “At the moment we are collecting the data for maize, because we did not have such a database. However, for sugar, we have received data from the four cooperative sugar factories in the state.

The aid will be provided in a proportionate manner from the 2019 Kharif season, depending on the amount acquired through the cooperative society. Under this program, 18 34,834 farmers will receive 1,500 crore rupees as a first payment for the rice harvest. Likewise, for the cultivation of sugar cane, the payment of a maximum of Rs 355 per quintal will be made according to the quantity of sugar cane purchased by the cooperative factory during the grinding year 2019- 20.

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Dn a crisis as deep and unprecedented as the coronavirus pandemic, the best way to help the greatest number is to put money in their pockets. In most cases, cash allows people to buy whatever they want: be it food grains, oil, medicine, a top-up on the cell phone, or a train ticket home. at their home. Money in hand also gives vulnerable people a little more confidence to face the many uncertainties of life in times of crisis. Yes, in a country as big as India there will be times when money won’t help, but for hundreds of millions of people money is the most useful thing today.

And thanks to Unified Payments Interface (UPI) and Jan Dhan, Aadhaar and Mobile (JAM), today India can process direct cash transfers to hundreds of millions quickly and efficiently.

It is therefore disappointing that direct cash transfers are not an important part of the Narendra Modi government’s economic program announced last week. Towards the end of March, it reallocated around 62,000 crore rupees for transfers to female Jan Dhan account holders, farmers and construction workers, but did not expand cash transfers thereafter. It is also not known whether the PM CARES fund will be used for this purpose.

Read also : Like a MEA to help NRIs in crisis, India also needs a system for its internal migrants

Direct money transfer was the only way

To my knowledge, no state government has introduced cash transfers either. We often talk about the MGNREGS, or National Rural Employment Guarantee Scheme, as if it were a direct cash transfer program. It’s not. He pays a salary in exchange for the work. It is at best an imperfect rural social security program, which is now forcibly adapted for emergency relief because the administrative apparatus for it exists in the country.

By definition, MGNREGS does nothing for vulnerable people in non-rural areas, who constitute around 40 percent of India’s population. Millions of people in cities – including the urban poor, migrant workers and the self-employed – find themselves in distress due to loss of income. I don’t think the lucky ones among us can imagine what it’s like to go two months without an income, with no end in sight for the lean days.

Perhaps cash transfers were the only way to help the needy quickly. This is because the Modi government does not even need to fund all cash transfers itself. At the onset of the crisis, I recommended that the government “allow all sections of society to directly help the needy. The Modi government is expected to roll out a citizen-to-citizen transfer program that allows individuals, charities and businesses to pay money directly into beneficiaries’ bank accounts.

Not only would such direct person-to-person cash transfers be 300 percent as effective as government administered funds, they would also relieve the government of the tax burden of having to fund, say, 3 percent of GDP in emergency relief. .

It can be done even now. The Modi government can still set up a common anonymized national database of the needy and offer tax incentives to individuals, businesses and NGOs who donate money through such a program. It is possible to register beneficiaries as easily as with a missed call. The Modi government has the historic opportunity to use direct person-to-person cash transfers to create the world’s largest social “social” network. security program. If he wishes.

Read also : Modi’s government to open the JAM for public contributions. PM Care alone cannot deliver

No need to depend on the government

But it can be done even without the government. I’m sharing an idea here in the hope that some of us can make this work in our areas of influence. Maybe we can do it in our neighborhood, city or state, with or without the support of our governments.

The basic concept is simple. A person asks for help by giving their phone number, basic demographic information, and the phone number of at least one referral person. This information is entered into a database. The reference person is then invited to confirm that he knows the person and that the help sought is real. If so, this person is entered on the list of applicants for assistance. Donors can view simple anonymized profiles of aid seekers and can donate to any specific person on the list, or to a category of aid seekers based on demographic indicators. Such a system can allow a donor to give, for example, “2000 Rs to 10 random people who have not yet received any transfers”.

Direct person-to-person money transfers can be extended to make money available to those who do not have a mobile phone, through grassroots partner NGOs.

It is not difficult to create a mobile app to make it happen. Anyone can do this, but if it’s done under the umbrella of a qualified non-profit organization, donors can enjoy tax benefits.

Read also : The coronavirus lockdown has given us a blank slate. We can write a new world when it rises

Developing a phased assistance system

Of course, the ideal scenario is for the Modi government to set up a national system of direct cash transfers. But we don’t need to depend on it or wait for it if we are to help. Some of my friends have given cash envelopes to needy people in their neighborhood over the past few weeks. Others distribute food packages to the needy. Still others use Twitter hashtags to direct cash transfers to farmers. It’s just as well that different people use different methods to help the people they want.

For reasons of scale, sustainability and impact, many of these highly laudable ad hoc initiatives need to evolve into a more systematic form. Direct cash transfers are the best option for this.

The author is the director of the Takshashila Institution, an independent center for research and education in public policy. Opinions are personal.

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