After 10 % Quota, Government May Announce Direct Benefit Transfers to Poor & Farmers

The Prime Minister, Narendra Modi-led-BJP government with its legislation on a 10 % quota for the general category poor in jobs and education receiving parliamentary support in the run-up to the upcoming Lok Sabha elections, is now considering the possibility of offering direct benefit transfers to people below poverty line (BPL) through the universal basic income (UBI) and to farmers through direct investment support.

Sources said the government is likely to announce a UBI worth Rs 2,500 /month firstly to the families below poverty line. The money will be transferred directly to people under this section, ending other sops like food and LPG subsidy to them.

The universal basic income dole would take care of half the nutritional needs of a family of 5 in rural areas and one-third requirement of the urban poor. For this, the government may budget around Rs 32,000 crore for April to June 2019.

Sources further said that the actual number of recipients will depend on the funds that the Reserve Bank of India (RBI) transfers to the national exchequer. In India, people below poverty line are estimated to be 27.5 % of the total population.

The Economic Survey held in 2017 had flagged the UBI scheme as ‘a conceptually appealing idea’ and a probable substitute to social welfare programmes aimed at reducing poverty.

The universal basic income scheme was hinted during the BJP manifesto for assembly polls in Rajasthan where the party said it will arrive at the income figure “after considering (recipient’s) income from different sources and the government benefits that he receives”.

For the 47 % farmers of the country, the government is mulling an altered copy of Telangana’s Rythu Bandhu scheme where cultivators tilling less than one acre of land would be given Rs 4000 /acre, or an amount thereof depending on the size of land holding, each for the Rabi and Kharif season.

Sources said the money for transfers to farmers would be supported by suspending the subsidies on seed and fertilisers, indicating that a clear picture of the plan would come out in July - the beginning of the cropping season.

They said transfers to farmers would be distributed after an updation of land records with recognised occupancy by the state to make sure that it does not go to the landlord. In turn, the states would be encouraged to start lease farming as an essential part of index of Ease of Doing Agri-Business.

Cabinet is also in view of the possibility of providing interest-free loan up to Rs 1 lakh for the farmers with land below one acre.

The two-pronged plan is likely to take care of the small land owners and the tiller-farmer who voted out the BJP government in Madhya Pradesh, Chhattisgarh and Rajasthan.