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Case Code: ECON075
Case Length: 12 Pages 
Period: 2018-2019   
Pub Date: 2019
Teaching Note:Available
Organization : Rythu Bandhu Scheme
Industry :Agriculture & Forestry
Countries : India
Themes: Public Policy/Government & Economy/Political Environment/Rural Markets
Case Studies  
Business Strategy
Human Resource Management
IT and Systems
Leadership & Entrepreneurship

Rythu Bandhu Scheme-A Welfare Program to Support Farm Investment in Telangana State of India

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Telangana State is located on the Deccan plateau , an area with a semi dry weather, which is completely dependent on the monsoon for cultivation. If the monsoon failed, it led to suicides by the farmers who had borrowed heavily from private money lenders to purchase inputs for cultivation. Most of the small and marginal farmers were happy with the RBS as they were able to purchase seeds, fertilizers, and pesticides for their cultivation. P. Madan (Madan), a farmer from Kamareddy District, Telangana, said that before the farming season began, he had purchased agricultural inputs for his land from private money lenders at a high rate of interest. Frequent small loans often added up and increased the outstanding debt..

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Farmer unions and organizations such as the Telangana Rashtra Rythu Sangam , Rythu Swarajya Vedika , Telangana Rythu JAC , and Telangana Rythu Sangam were of the view that the RBS benefitted absentee landlords, while the real cultivators of the land – the tenant farmers – were not getting any of the benefit. In Telangana, there were 14 lakh tenant farmers in 2018 who took the land on lease and cultivated them. These tenant farmers were the ones who invested their money for cultivation and were incurring the input costs and risks of agricultural production. Farmer organizations claimed that after the formation of Telangana state in 2014, there had been 3,500 farmer suicides reported in the state and tenant farmers comprised 60% of them...


As for the RBS, the Telangana Government intended to continue with the scheme and provide support to the farmers to help ease their financial burden. The success of the RBS led to many other state governments like Odisha, Madhya Pradesh, and Jharkhand coming up with similar farmer support schemes with minor variations to help farmers withstand agrarian distress. (Refer to Exhibit III for different schemes by the central government and the state governments)...



Exhibit I: Objectives of Rythu Bandhu Scheme
Exhibit II: Features of Rythu Bandhu Scheme
Exhibit III: Different Farmer Support Schemes by the Central and the State Governments