The Government of Telangana has implemented a groundbreaking cash transfer program called the Rythu Bandhu scheme, or Farmer’s Investment Support Scheme (FISS), aimed at assisting farmers in making investments for two crops a year. This innovative program, the first of its kind in India, provides 5.8 million farmers with ₹5,000 per acre per season, disbursed directly to their bank accounts, thereby reducing the risk of debt and ensuring timely investment in agricultural resources.
A Brief History of the Rythu Bandhu Scheme
The Rythu Bandhu scheme was announced by the Chief Minister of Telangana, K. Chandrashekhar Rao, at the Farmers Coordination Committee (Rythu Samanvaya Samithi) conference on 25 February 2018. The government allocated ₹12,000 crores for the 2018-19 state budget, and the program was officially launched on 10 May 2018 at Dharmarajpalli village in Karimnagar.
Objectives and Budget
The primary goals of the Rythu Bandhu scheme are to provide farmers with a timely cash award for their initial investment requirements and to ensure they do not become trapped in debt. The program’s overall budget for 2018-19 was Rs. 120 billion.
Beneficiaries and Coverage
The scheme provides financial assistance to 5.8 million farmers, with no cap on the number of acres. Approximately 55% of the population in Telangana relies on agriculture for their livelihood. The agricultural land holdings in the state are as follows:
| Land Extent | No. of Farmers | Total Acres | Est. Cost |
|---|---|---|---|
| under 1 acre | 18 lakhs | 18 lakhs | 14.4 billion |
| 1-2 acres | 24 lakhs | 48 lakhs | 38.4 billion |
| 3-5 acres | 11 lakhs | 44 lakhs (avg) | 35.2 billion |
| 5-10 acres | 4.4 lakhs | 33 lakhs (avg) | 26.4 billion |
| > 10 acres | 94,000 | 9.4 lakhs | 7.52 billion |
| > 25 acres | 6,488 | 1.62 lakhs | 1.3 billion |
| > 50 acres | 298 | 14,900 | 119 million |
Distribution Process
The funds are distributed to farmers through bank bearer cheques, with the Agriculture Extension Officers (AEO) supervising the distribution at the village level. The AEOs use tablet computers to record cheque details and streamline the monitoring process.
New Pattadar Passbook and Land Bank Website
In addition to the financial support, the government is also providing farmers with a new Pattadar Passbook, a highly secure title deed with 17 tamper-proof security features. The passbook is issued after the government completes an exercise to purify land records. A land bank website called Dharani has also been developed to record all land holdings in the state.
Monitoring the Scheme
The National Informatics Centre (NIC) is developing special dashboard software to remotely monitor the Rythu Bandhu scheme. Research samples are selected through random sampling to ensure data accuracy and unbiased results.
Impact and Sustainability
According to a report by the Tata Institute of Social Sciences, around 78% of landowner farmers received the full cash transfer for both seasons. The remaining 22% either did not receive the financial transfer at all or only partially in one or both seasons, with small-scale food producers making up the majority of these farms. The primary cause of not receiving the cash transfer in most cases was the farmers’ lack of the new Pattadar Passbook for all or some of their land.
The program directly affects 5.8 to 6 million households that own land, depending on the time of year. Despite income reductions resulting from the economic disruptions caused by the COVID-19 outbreak, a total of ₹14.64 billion was distributed under the plan in 2020-21. The scheme is considered sustainable as it represents only around 0.68% of the state’s GDP and approximately 7% of the revenue expenditures in the state budget.
The Give it Up! Option
To encourage wealthy farmers to contribute to the program’s sustainability, the Chief Minister introduced the “Give it Up!” option, through which farmers can voluntarily forgo financial support. The Chief Minister himself was the first farmer to make use of this option. The funds saved in this manner are directed to the corpus of the Rythu Samanvaya Samithi.
Challenges and Issues
One of the main challenges faced by the Rythu Bandhu scheme is the exclusion of tenant farmers from the program. This exclusion was implemented to prevent legal disputes arising from the tenancy, as per the Hyderabad Tenancy and Agricultural Lands Act, 1950. As a result, the tenancy column was removed from the newly issued Pattadar Passbook.
Replicating Success: Other States and the Central Government
The successful implementation of the Rythu Bandhu scheme in Telangana has caught the attention of other states and the central government. Several states, including Andhra Pradesh, Odisha, and Tamil Nadu, have either implemented or are considering similar direct cash transfer programs for their farmers. The central government is also exploring the possibility of adopting such schemes at the national level to uplift the agricultural sector and provide much-needed financial support to farmers.
Technological Innovations
As the Rythu Bandhu scheme continues to evolve, technological innovations can play a crucial role in enhancing its effectiveness. The use of advanced data analytics and artificial intelligence could help streamline the distribution process and identify potential beneficiaries who might be inadvertently excluded from the program. Additionally, the integration of remote sensing and satellite imagery could enable the government to monitor crop growth and provide targeted assistance based on the specific needs of each region.
Ensuring Inclusivity
For the Rythu Bandhu scheme to reach its full potential, it is essential to address the issues of inclusivity, particularly concerning tenant farmers and small-scale food producers. Amendments to existing land and tenancy laws, as well as the introduction of comprehensive land reforms, could help ensure that all eligible farmers receive the financial support they need. Furthermore, creating awareness programs and simplifying the application process for the Pattadar Passbook can help improve access to the scheme for marginalized farmers.
Strengthening Agricultural Infrastructure
While the Rythu Bandhu scheme provides much-needed financial assistance to farmers, there is a need to simultaneously invest in strengthening the agricultural infrastructure. This includes improving irrigation facilities, providing better access to quality seeds and fertilizers, and promoting sustainable farming practices. Such initiatives, when implemented alongside the Rythu Bandhu scheme, can help create a more robust agricultural sector capable of meeting the growing food demands of the nation.
Future Prospects and Conclusion
The Rythu Bandhu scheme has set a precedent for other Indian states to follow. Its focus on direct cash transfers has the potential to transform the agricultural sector by empowering farmers to make timely investments in essential resources, reducing the risk of debt, and promoting sustainable agriculture. Although the program has faced some challenges, its continued success will depend on effective monitoring, timely distribution of funds, and addressing the concerns of small-scale food producers and tenant farmers.