What is Rythu Bandhu? The Telangana farmers’ scheme that everyone thinks is better than loan waivers

A few days ago, Chairman of India’s largest lender State Bank of India (SBI), Rajnish Kumar, said that loan waivers are not a permanent solution; instead, he argued for an investment scheme to increase the income of farmers on similar lines of Telangana’s Rythu Bandhu.

What is Rythu Bandhu?

In August this year, Telangana government launched ‘Rythu Bandhu’ investment support scheme for farmers.

The Rythu Bandhu (Agriculture Investment Support Scheme) takes care of initial investment needs of every farmer.

Aimed at relieving farmers of debt burden and cease them from falling into the debt trap again, the scheme provides a grant of Rs 4,000 per acre per farmer each season for the purchase of inputs like seeds, fertilizers, pesticides, labour and other investments in the field operations of farmer’s choice for the crop season.

A quasi UBI scheme:

Former Chief Economic Advisor Arvind Subramanian, who floated the idea of Universal Basic Income (UBI) for farmers in the Economic Survey, has said that Rythu Bandhu is a quasi UBI scheme, which had manifold benefits.

If Rythu Bandhu could be fiscally unsustainable but if it replaces some and all of the schemes such as schemes for bad harvests (monsoon failures), crop insurance and loan waivers, it could be advantageous. However, he also said that a scheme like Rythu Bandhu will take some time for implementation.

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