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Thursday, July 09, 2020

Lessons from Telangana’s Rythu Bandhu

As government thinks of direct benefit transfers to low-income groups, it is instructive to look at how similar experiments in states like Telangana have played out.

Published: June 2, 2020 7:25:44 pm
Prime Minister’s Crop Insurance Scheme, Madhya Pradesh Prime Minister’s Crop Insurance Scheme, Madhya Pradesh Crop Insurance Scheme, India news, Indian Express Over the last two years, the central government, and six state governments, have launched DBT schemes for supporting farmers’ income. (Representational)

Written by Diya Uday and Bhargavi Zaveri

In the wake of the COVID-19 epidemic, there is widespread demand for enhancing direct income support to low-income groups who are suffering disproportionately from the pandemic. In particular, there is an increasing clamour for enhancing the amount distributed through the PM-KISAN scheme, which provides an annual sum of Rs 6,000 to farmer families who own cultivable land. Over the last two years, the central government, and six state governments, have launched DBT schemes for supporting farmers’ income. The proliferation of such schemes provides a unique opportunity to assess the workability of the DBT schemes, the underlying state capacity and infrastructure as well as the overall satisfaction of the beneficiaries with the scheme. Learnings from these two years could aid policy makers with deep insight, augmenting capacity for existing schemes or substituting them entirely depending on their performance.

In a field study spanning six months, we studied the implementation of the Rythu Bandhu scheme (RBS), a DBT scheme implemented by the Telangana government that relies on land records for the identification of beneficiaries. The scheme offers an annual income support of Rs 10,000 per acre to every farmer who owns agricultural land. We found that the scheme worked reasonably well and the beneficiaries we interviewed showed high levels of satisfaction with RBS. However, there are several caveats to this general finding and these caveats hold important insights on designing such DBT schemes.

At the outset, the RBS is a relatively simple scheme to administer because it is unconditional and relies on pre-existing land records infrastructure. Beneficiaries are not required to pro-actively register themselves for availing the benefit nor do they have to show any proof — such as whether they actually cultivated the land or utilised the amount for purchasing agricultural inputs — for claiming the benefit. The state uses the existing land records infrastructure to generate the list of beneficiaries.

This significantly reduced the costs and resources required for the administration of the RBS. More importantly, it increased the overall satisfaction among the beneficiaries as it reduced their touch-points with the administration. This has led to relatively higher satisfaction levels with the RBS, as compared to the PM-Kisan scheme, which has a series of exclusions. These exclusions are linked to the size of the land parcel owned, the profession of the land owner, whether or not the land owner is in receipt of pensions or has paid income tax in the previous assessment year. This increases the costs of administering the scheme and reduces the overall satisfaction of the beneficiaries from it.

Unlike several other states which have rolled out similar agriculture income support schemes, the Telangana government undertook a state-wide land records updation drive (LRUP) prior to rolling out the RBS. This drive involved the participation of approximately 1,600 teams comprising two-three persons each from the revenue department. Covering 32 out of the 33 districts in the state, the revenue department officials went from village to village to update the land records pertaining to each agricultural land parcel. Fresh, digitalised pattadar passbooks were issued to the owners of agricultural land parcels. Land parcels which had pending disputes as to the title, and boundary were kept aside for the second phase of the LRUP.

Several studies that have shaped the discourse on land titling suggest that the courts are clogged with title-related disputes. However, we found that the state government could clear about 95 per cent of the agricultural land as being free of ownership-related disputes (Table 1).

There are two possible reasons for this. First, the state government reduced the scope of information recorded in the newly-issued digital pattadar passbooks. For example, possessory interests such as tenancies and mortgages were not sought to be recorded. Second, the LRUP did not include a boundary survey, thereby considerably reducing the extent of verification required. As we explain below, these two weaknesses are turning out to be the Achilles’ heel in the implementation of the RBS.

Regarding the first, the absence of a survey has resulted in inconsistencies between the area of land parcels recorded in the pahani — the base land record maintained at the village level — and the area of land parcels recorded in the RBS beneficiaries list. For instance, we compared the pahani with the RBS beneficiaries list in two sample villages. We found that out of the total number of beneficiaries in the RBS beneficiaries’ list for these two villages (806), for nearly half the beneficiaries (405), there was a discrepancy between the area of the land parcel recorded in the pahani and that recorded in the RBS list.

On an average, we found that an excess of 0.55 and 0.17 acres of land per beneficiary has been recorded in the RBS list for these two villages, when compared to the pahani (Table 2).

This leads to excess land of approximately 460 acres across these two villages being taken into account under the RBS. Since the RBS entitlement is linked to the size of each land parcel, an overestimation of land parcel sizes will lead to considerable fiscal leakage. We estimate that such over-inclusion leads to an annual excess pay-out of about Rs 46 lakh across these two villages under the RBS.

Regarding the second reason mentioned above, since the digital pattadar passbooks are used for the identification of beneficiaries — and these passbooks did not capture information on possessory interests — tenant farmers were, by design, excluded from the purview of the RBS. This is a serious deficiency, as apart from creating insecurity of tenure for the tenant, it deprives the tiller of the land from income support. Farmer-level interviews that we conducted indicate that the DBT amount is not being passed down from land owners to tenants.

Finally, we noted that while the DBT mechanism has reduced the touchpoints between the beneficiary and the administration, a systematic grievance redressal mechanism is missing. We found several beneficiaries who had not received the RBS entitlement for the rabi 2019 season, and did not know which authority to approach for redress. This also deprives the state government of a natural feedback loop on the implementation and last-mile effectiveness of the scheme. On the other hand, Odisha, which has implemented a similar scheme explicitly provides for a telephone-based grievance redressal system that aids beneficiaries, and allows the state government to track the performance of the scheme.

To conclude, while DBTs considerably simplify the process of accessing welfare benefits, the success of the scheme will depend on the simplicity of design and the state of infrastructure that underlies the identification process. Even as governments assess the possibility of augmenting income support in the wake of the pandemic to rural populations, the success and weaknesses of state-level experiments must be taken into account to ensure that the benefits reach their intended destination.

(The authors are researchers at the Finance Research Group, Mumbai.)

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