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Rythu Bandhu Scheme: How does it helps farmer? Research Team | Posted On Tuesday, February 05,2019, 01:43 PM

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Rythu Bandhu Scheme: How does it helps farmer?



The Finance Minister in his Budget speech on February 1st 2019 said that 12 Crore farmers with holdings less than 5 acres would get Rs 6,000 each year. This would be given in 3 installments of Rs 2,000 each.

Under Modi Government’s Income Support Scheme, the 12 Crore small and marginal farmers get Rs 6,000 directly transferred to bank accounts. Along with this, there are government schemes for giving them a house, free healthcare, subsidized food, free sanitation, electricity, road, gas connections and twice the amount of credit at very low interest rates.

All this has only one purpose…Address Farmers Distress…In all this we take a close look at the Farmers Income Support Scheme or FISS popularly called Telangana  Rythu Bandhu Scheme.

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What Is Farmers Income Support Scheme?

What is Telangana Rythu Bandhu Scheme?

The Telangana Government believes investment increases agricultural productivity which increases the income of farmers. The Telangana Government in its Budget has set aside Rs 12,000 Crores for the Agriculture Investment Support Scheme popularly called Rythu Bandhu for Financial Year 2018-19.

The Rythu Bandhu Scheme also called Farmers Income Support Scheme is a welfare scheme to support farmer’s investment for two crops a year.

More than 58 Lakh farmers enjoy the benefits of Rythu Bandhu Scheme. The Telangana Government grants Rs 4,000 per acre per farmer each season for the purpose of seeds, fertilizers, pesticides, labour and other investments. This is twice a year for Rabi and Kharif season. This is a direct support to farmers where farmers get cheques under Rythu Bandhu scheme.

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Why Rythu Bandhu Scheme?

The Chairman of India’s largest lender, SBI, Rajnish Kumar, believes farm loan waivers are not a permanent solution. An investment support scheme on the lines of Rythu Bandhu Scheme would work. Many people believe Rythu Bandhu Scheme is better than farm loan waiver.

The Rythu Bandhu Scheme or Agriculture Investment Support Scheme takes care of the initial investment needs of the farmers. Each Farmer gets Rs 4,000 per acre each season (Kharif and Rabi), to purchase seeds, fertilizers, pesticides, labour and for other investments a farmer needs. This scheme brings the farmer out of debt.

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Advantages of Rythu Bandhu Scheme:

  • Rythu Bandhu Scheme takes care of the initial investment of each farmer.
  • Farmers would never fall in debt trap.
  • Removes debt burden of farmers.
  • Empowers farmers
  • End of farmer land disputes.

Eligibility of Telangana Rythu Bandhu Scheme:

  • Farmers of Telangana State are eligible for Rythu Bandhu.
  • Farmers who own land plots benefit from the scheme.
  • Tenant farmers are not eligible for this scheme.
  • Wealthy farmers are excluded.
  • Pattadar registered under Forest Right Record can apply.

Features of Telangana Rythu Bandhu Scheme:

Farmers: Small and marginal farmers irrespective of OBC, General, SC or ST castes can apply to the scheme.

Two main crops: Rabi and Kharif crops make most of the money. The Telangana Government offers assistance for the sowing of these crops.

Financial assistance: Farmers get Rs 8,000 per acre paid out on a yearly basis. Payment is in two installments, one during the Rabi season and one during the Kharif season.        

Upper Limit: No land holding upper limit specified. Most farmers have 10-acre land holdings. The scheme covers 1.42 Crore acre areas.

Land Ownership: Telangana Government offers Pattadar Dharani passbooks. Each farmer gets this passbook which helps identify ownership of land.

Payments: Payment is made via cheque. Farmers deposit cheques where they have bank accounts. The money is deposited in these accounts.

Rythu Bandhu Scheme vs Farm Loan Waiver

Loan waivers are no match for income support. Loan waivers address past distress, while investment support addresses the future. Loan waivers are a one-time solution while investment support addresses the root causes of farmer distress.

More than 58 Lakhs Telangana farmers have benefited from Rythu Bandhu Scheme. The Agriculture Investment Support Scheme has benefitted all farm households, except tenant farmers.

The Former Chief Economic Advisor (CEA) Arvind Subramanian says Rythu Bandhu Scheme is a quasi Universal Basic Income scheme with many benefits. This scheme could replace schemes for bad harvests, crop insurance and loan waivers.

What is Rythu Bima?

The Telangana Government wants to ensure economic and social security to farmers. It has launched an innovative scheme called Rythu Bima or Farmers Group Life Insurance Scheme. This is a first of a kind scheme in India.

The aim of Rythu Bima is to support a farmer’s family (Financial Relief and Social Security to Farmers) in case of farmer death due to any reason.

A farmers family suffers financial distress on his death and Rythu Bima aims to eliminate this problem. The Rythu Bima (Farmers Group Life Insurance Scheme) provides money to family members of the farmer for daily needs in case farmer dies due to any reason.

  • Farmers in the age group of 18 to 59 years can join the scheme.
  • The Government pays the entire premium to LIC.
  • If a farmer dies for any reason (Including natural causes), the nominee (family members) get Rs 5 Lakhs within 10 days.
  • Many poor farmers who struggle with livelihood and belong to weaker sections benefit, as their families are taken care of in case something happens to them.

Why Rythu Bima succeeds?

  • This scheme is implemented based on farmer-wise online land data using Information Technology and Online Portals/MIS. This increases officer’s outreach for effective and efficient implementation.
  • Rythu Bima is implemented using efficient technology. The nominee doesn’t have to approach any office for claim settlement.
  • Outreach officers at village level collect data from the revenue department in case farmer loses life. This is submitted to LIC on behalf of the designated nominee. The claim settlement is transferred through RTGS to nominee account.

Disadvantages of Rythu Bandhu Scheme:

The scheme provides investment support to farmers, but not tenant farmers. The tenant farmers cultivate 30% of the land in Telangana. They are around 15 Lakhs tenant farmers who draw no benefit from the Rythu Bandhu Scheme.

Income support schemes are the future and address problems farmers face. The Odisha Government is following in the footsteps of the Telangana Government and has announced an income support scheme. Time will tell if income support schemes stand the test of time. 

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