Govt realises 8216;first8217; aid better than post-op

As the country awaits the Met Departments official prediction for monsoon,to come at the end of this month,the government has learnt one key lesson...

As the country awaits the Met Departments official prediction for monsoon,to come at the end of this month,the government has learnt one key lesson from last years experience of bad rains: It is better to give subsidies to save the standing crop rather than dole out relief once the crop has failed.

A realisation of this,sources said,came at a recent meeting of the High-Level Committee headed by Finance Minister Pranab Mukherjee,which finally cleared the states demands for drought relief. Over Rs 4,800 crore was approved from the National Calamity Contingency Fund NCCF for 352 districts in 15 states hit by drought last year.

What was interesting was that in addition,the Finance Ministry approved Rs 1,200 crore for Punjab and Haryana,which had not declared drought in 2009 despite being the worst affected by the deficient rainfall,and had instead chosen to put in extra efforts to save the standing crop.

The money will help cover the cost incurred by the two states in providing power to farmers to save the paddy crop and later to sow the wheat crop. While Punjab is likely to receive Rs 800 crore,Haryana would receive about Rs 400 crore of this Central assistance.

Interestingly,while the 14 other states which rushed to declare drought would together get Rs 3,600 crore of the Central aid,according to sources,the largest chunk Rs 1,200 crore would go to poll-bound Bihar. The state hadnt been able to save over 11 lakh hectares of paddy crop.

This holds a serious policy lesson for dealing with agricultural contingencies. It is better to incentivise state governments to save the crop as in the case of Punjab and Haryana through financial assistance than incetivising states like Bihar to let the crop suffer and also get funds, said a senior government functionary associated with the meeting.

The deficient monsoon last year had led to a massive decline in area under paddy crop 59.3 lakh hectares,mainly in Uttar Pradesh about 20 lakh hectares less,Bihar about 11 lakh hectares,and Andhra Pradesh about 7 lakh hectares less.

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Punjab and Haryanas efforts to save their paddy crop had got them praise from the top leadership,including Prime Minister Manmohan Singh,Finance Minister Pranab Mukherjee and Agriculture Minister Sharad Pawar.

Apart from Bihar,the other major recipients of the NCCF grant include Rajasthan about Rs 1,034 crore,Maharashtra about Rs 672 crore,Andhra Pradesh about Rs 640 crore,Uttar Pradesh about Rs 515 crore,Madhya Pradesh about Rs 245 crore,and Jharkhand about Rs 200 crore.