HYDERABAD: Many fear that subsidies have become a burden on Telangana’s economy. With almost a fourth of the State Budget likely to be given away as subsidies to various sections, mostly in the form of direct cash benefit schemes, there is a feeling that the State economy has become “overly subsidised.”
With the latest announcement by Chief Minister K Chandrasekhar Rao that `4,000 would be deposited into the bank accounts of the farmers for purchasing fertilisers per acre, the quantum of subsidies is set to increase. Finance department officials said that have to struggle to manage the budget from next year onwards.
Though modalities have yet to be worked out on cash deposit of `4,000 per acre into the bank accounts of farmers, the State is plans to give cash for fertilisers to all the farmers and to all the lands under them, irrespective of their economic stature.
The State has an ambitious plan to irrigate over one crore acre. It means for two crops in a year, the State is required to supply fertilisers to two crore acres and it cost the exchequer `8,000 crore.
‘Power’ to the people
The other major subsidy the government would give to farmers is power bill for the proposed lift irrigation projects. “The lift irrigation projects in the State require 10,000 MW power. We will supply this power costing around `12,000 crore free of cost to farmers,” the CM had already announced.
Economist defends policy
Economist Dr Gautam Pingle defended the cash deposit in farmers’ accounts for fertilisers. “The State government will collect revenues from one hand and give the same money with another hand in the form of subsidies. Around 60 per cent population in the state depend on agriculture and lack facilities,” Gautam Pingle told Express, welcoming the latest subsidy to farmers.
Pingle added that the loans of industrialists were being waived, the middle-class were getting subsidies in the form of power tariff. As the government was giving direct cash to farmers instead of supplying the fertiliser bags, the misuse would be minimised, he opined.
Chief Minister K Chandrasekhar Rao had remarked that there were different economic models. One model, popular in the US, opposed heavy subsidisation.
The other favoured subsidies to the poor, he had explained. “But, we are following both models of economies. Ours is a mixed economy. When people are dying for want of food, we have to provide succour to them in the form of subsidies,” KCR had said.