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Centre’s economic package is debt-based — it’s not helping reduce the challenges of states

Bhupesh Baghel writes: There is no need for dramatic announcements. Direct bank transfers should be made into the accounts of farmers, labourers, villagers, tribals, women and the deprived sections of society, who have talent and passion, but lack economic resources.

Written by Bhupesh Baghel |
Updated: June 5, 2020 9:52:33 am
corona economic package, Nyay scheme, Congress Rahul Gandhi Nyay scheme, Rajiv Gandhi Kisan Nyay Scheme, pradhan mantri jan dhan yojana, coronavirus exit strategy, india lockdown, cash transfer, covid 19 cases, relief fund for migrants, migrants free food grains Some people are talking about turning disaster into opportunity, but I believe that in times of disaster, sensitivity and sincerity serve the needed. (Illustration by C R Sasikumar)

COVID-19 has led the world economy to the verge of a recession. The measures adopted to deal with the crisis will take a long time to fix the situation. Meanwhile, in different regions of India, the ongoing process of migrant workers returning back home due to the jammed wheels of industries indicate a prolonged stagnation of economic activity. In this context, the challenge is to look at the Nyay scheme announced by former Congress President Rahul Gandhi during the Lok Sabha elections with a fresh perspective.

It would not be wrong to say that even before the economic downturn and the spread of COVID-19 in the country, socio-economic life was in great distress, and so, there was a need for a basic minimum monthly income. This minimum monthly income not only helps in times of illness and saves families from starvation, but also brings money to the market and strengthens the economy indirectly from the ground up.

The Centre has announced an economic package of Rs 20 lakh crore for the entire country, of which half has been used even before it was announced and much of the rest will be provided to entrepreneurs in the form of debt. Now, it is beyond understanding that amid the current lockdown situation, how demand will be generated and if demand does not rise, how will these new loans inject life into the economy. In such extreme situations, Rahul Gandhi’s Nyay scheme is relevant with its goal of “transfer cash not loans”. Whether you want to save lives or the economy, cash transfers are the best solution.

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Chhattisgarh has a poverty rate of 39.9 per cent. Eighty per cent of the state’s population is engaged in farming, and 44 per cent of its area is covered with forests. According to government figures, the irrigation capacity is 34 per cent, but the actual figures are less. Our journey began on December 17, 2018, when people of the state rejected the former government — which had promised to double farmers’ incomes — and within just two hours of our government being formed, farmers’ debts were waived.

The idea behind this model was derived from the thought process of the Congress during UPA-1 and UPA2. We understood at the outset that the real entrepreneurs in our economy were our farmers and tribal forest produce collectors. We announced the commencement of the Nyay Yojana in Chhattisgarh, and for the past one-and-a-half years, the support price for the largest crop in the state — paddy — was raised from Rs 1,800 to Rs 2,500. Due to the liberal policy of our government, 80.37 lakh metric tonnes of paddy was collected from farmers at the rate of Rs 2,500 per quintal. This injected Rs 20,000 crore directly into farmers’ pockets, an increase of about Rs 8,000 crore from the support price prevailing at the time. We have waived loans worth Rs 9,000 crore for farmers, and Rs 244 crore worth of irrigation tax was forgiven. We did the same for the tendu patta collectors, whose wage rate was increased from Rs 2,500 to Rs 4,000 per standard bag.

During the previous BJP government’s tenure, only seven items of forest produce were purchased at the support price. We decided to buy 25 items at the minimum support price. In this way, by increasing the purchasing power of common villagers, farmers, and tribals residing in the forests, we were successful in reducing the effects of the economic slowdown in the state within one-and-a-half years. In 2019, when we had to buy paddy from farmers again, the Centre declared that if we will buy paddy from farmers at a higher support price — that is, if we provided a bonus to our farmers — then it will not be purchased in the central pool. While hurting the federal system, the economic interests of our farmers were given the short shrift. At that moment, we used our discretion, created a new record of purchasing 82.70 lakh MT of paddy at the support price, and decided that our farmers won’t have to face any harm at any cost.

The announcement regarding the Rajiv Gandhi Kisan Nyay Scheme was made in the state’s 2020-21 budget. The scheme is being implemented from May 21, the day of the martyrdom of former Prime Minister Rajiv Gandhi.


Not just the purchase of paddy, but a “grant-in-aid” will be provided for a total of 14 items, including maize and sugarcane. A comprehensive scheme of “grant-in-aid” of Rs 5,700 crore has been prepared which will benefit about 19 lakh farmers. Of this, Rs 1,500 crore is being disbursed in the first phase to farmers for paddy, maize and sugarcane. The process began on May 21.

I strongly believe that we have turned challenges into opportunities in Chhattisgarh. Some people are talking about turning the disaster into an opportunity, but I believe that in times of disaster, what is needed is sensitivity and sincerity. This is why even though Chhattisgarh has crossed the 100-cases mark vis a vis COVID-19, our recovery rate stands at 70 to 90 per cent. There is no doubt that with limited resources, the state has found it exceedingly difficult to fight the COVID challenge. The PM-Cares Fund has received more donations by attracting CSR funds, and a crisis has been created for the state. Despite this, Chhattisgarh is fighting for both — an economic revival and the COVID-19 battle with unparalleled determination. I believe that the more cash we transfer into the bank accounts of farmers, villagers, the poor and tribals, under the ideology of the Nyay Scheme, our rural base will be strengthened.

All the nations of the world affected by COVID-19 are following this path of recovery. Unfortunately, the Centre’s package is debt-based and is not helping reduce the challenges of the states. There is no need for dramatic announcements. Direct bank transfers should be made into the accounts of farmers, labourers, villagers, tribals, women and the deprived sections of society, who have talent and passion, but lack economic resources. We have tried to connect our society with its old cultural and ideological heritage. With this aim in mind, the scheme of “Narva (traditional water resources), Garwa (livestock), Ghurwa (organic manure), and Bari (industry)” conservation was created for the promotion and revival of rural livelihoods.


An environment of communal harmony has also become an important component in the economic development of the state. The Chhattisgarh model is inspired by the true ideology of the Congress. With the Rajiv Gandhi Kisan Nyay Yojna, our social and economic culture has found a new basis, which is not a statement, but is action-oriented. At a time of a crisis, when various models of development have failed throughout the country and the world, the Chhattisgarh model sets an example for the nation. This scheme will help our migrant workers returning to their villages to get support to start their lives afresh through a major contribution to agriculture and forest produce.

Congress president Sonia Gandhi has instructed us to take the initiative to provide a minimum fixed income to landless agricultural labourers as well. On the day of the martyrdom of Rajiv Gandhi, we decided that the Landless Agricultural Labour NYAY Yojana must be implemented at the earliest. For this, a high-level committee headed by the chief secretary has been asked to submit a report in two months. We believe that this initiative will play a big role in the economic-social rehabilitation of COVID-affected people in the state.

This article first appeared in the print edition on June 5 under the title “Cash transfers, not loans”. The writer is Chief Minister of Chhattisgarh.

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First published on: 05-06-2020 at 03:00:48 am
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