The NITI Aayog has recommended direct income support of Rs 15,000 per hectare per annum to farmers. In this context, discuss the objectives and challenges in implementing it. (200 Words)
Refer - Business Standard
Enrich the answer from other sources, if the question demands.
IAS Parliament 5 years
KEY POINTS
Objectives of Direct income transfers
· The existing subsidies are often inefficiently disbursed and a direct transfer to a farmer’s account will be a more efficient alternative.
· Unlike minimum support prices, a direct income support does not accentuate market distortions and the associated efficiency losses. This method is far more acceptable globally and in line with the demands of the World Trade Organization.
· Direct income transfers more targeted towards small farmers, apart from being more inclusive and equitable.
Challenges of Direct income transfers
· The problem in rolling back existing subsidies. An income support scheme can work efficiently only if all such subsidies are withdrawn.
· Given the acute poverty in India as well as the reluctance of Government to do away with existing subsidies, it is more likely that an income support scheme will only be in addition to the existing subsidies.
· This leads to the question of the financial viability of any such scheme. Governments, both at the Centre and in the states, are stretched and it is likely that targets of fiscal deficits and overall public debt to gross domestic product will not be met.
· The other drawback of the scheme is that India does not have digitised land records and without them the scheme is almost impossible to implement.
The government should rather think of alternatives such as investment in marketing infrastructure, storage and food processing, allowing direct purchases from farmer producer organisations instead of requiring farmers to sell their produce at registered markets.
