The Indian government is mulling over a proposal to increase financial aid to small-scale farmers by 33%. This move is seen as a way for Prime Minister Narendra Modi’s party to strengthen its backing from a crucial group of voters in preparation for upcoming elections.
The government is thinking about increasing the yearly cash support for small farmers to Rs 8,000 ($96), up from the current Rs 6,000. This information comes from two insiders familiar with the talks, who prefer not to be named since it’s still being looked into.
If given the green light, the proposal would mean an additional Rs 20,000 crore for the government, alongside the originally budgeted Rs 60,000 crore for the program in this fiscal year until March 2024.
Nanu Bhasin, the trusted spokesperson for the Finance Ministry, decided to stay quiet about the situation.”
In India, where about 65% of the massive 1.4 billion population lives in villages, farmers play a crucial role in elections. They’re an important group of voters for Modi, who’s aiming for an unusual third term in the upcoming election. While he’s still well-liked, with 55% of people supporting him, concerns about growing inequality and unemployment could be a hurdle.
The government is working hard to increase farmers’ earnings, especially after steps like stopping some rice exports affected rural incomes. This year’s monsoon rains have been the weakest in five years, which puts important crops at risk.
Since the subsidy program began in December 2018, Modi’s government has provided a total of Rs 2.42 lakh crore to 110 million beneficiaries. They’re now talking about making the rules a bit more flexible to help even more farmers with direct cash transfers. The final decision on these ideas hasn’t been made yet.
The government is also doing other things to help families with lower incomes, like continuing the free grain program into the next year and thinking about giving cheaper loans for small city homes. Just last week, the cabinet agreed to increase subsidies on cooking gas.
