india

Updated: Jul 20, 2019 02:46 IST

This is the time to stop paying minimum support prices (MSPs), a major hindrance in crop diversification and environment protection; instead the farmer should get cash subsidy, which is doable after PM Kisan has established an effective direct benefit transfer mechanism, former vice-chairman of NITI Aayog Arvind Panagariya said.

“Major subsidies given to two classes of beneficiaries – farmers and rural poor – can be clubbed in two sets and equivalent cash can be transferred in their bank accounts,” he said on Friday.

The beneficiaries of PM Kisan are the same set of people who are getting MSPs and fertiliser subsidies. The government can club all these benefits and pay in cash which will stop various distortions the Indian agriculture is facing, he said.

Assured returns on wheat and rice in the form of MSPs are the main reason for over dependence on cultivation of the two crops, responsible for depleting the water table and creating environmental hazards. Similarly, fertiliser subsidy has deteriorated soil health, he said.

Similarly, the subsidy for jobless rural poor (Mahatma Gandhi National Rural Employment Guarantee Act) and food subsidy meant for rural poor can be combined for another “larger” set of beneficiaries and they should be paid in cash, he said.