Budget 2019: Basic income support scheme to cost at least Rs 1.5 trillion to the nation
Domestic ratings agency India Ratings Tuesday expects the interim budget to announce an income support scheme for the poor which may at least cost the Centre Rs 1.5 trillion per annum or 0.7 percent of the GDP for the Centre and states combined and is better than any farm loan waivers. In comments that come a day after the Opposition Congress promised to roll out an income support scheme if voted to power after the summer elections, the agency said it expects the forthcoming budget to have such a measure.
Stating that agrarian distress is not new and various governments deployed a number of tools to fight the same in the past such as an increase in public spending in rural areas, increasing minimum support price, enhancing agricultural credit and enhanced extension activities, launching the rural employment guarantee scheme, writing off farm loans, providing direct income support and/or a combination of the ways.
In view of the upcoming general elections, the agency said the focus of both the Centre and the state budgets will be on measures to address the farmers' woes. If the interim budget announces an income support of say Rs 8,000 per acre per annum for marginal and small farmers, a marginal farmer and a small farmer would receive Rs 7,515 and Rs 27,942 per annum on average, respectively.
It is not an easy option either ways, it said, as states finances will come under pressure.If it is rolled out as a core centrally-sponsored scheme, Andhra, Bihar, Chhattisgarh, Jharkhand, MP, Odisha, Telangana and UP will be under pressure as they have already announced farm loan waivers, and only Chhattisgarh and Jharkhand have "some fiscal space" to accommodate such expenditure.