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2) While the cash-transfer model may be popular and politically rewarding, it is unlikely to solve the crisis in agriculture. Examine.(250 words)

TopicGovernment policies and interventions for development in various sectors and issues arising out of their design and implementation.

2) While the cash-transfer model may be popular and politically rewarding, it is unlikely to solve the crisis in agriculture. Examine.(250 words)


Why this question

This year’s interim budget has pledged to provide cash transfers of Rs 6000 to farmers. Besides, various state governments have also launched similar programmes. In this context it is important to discuss the efficacy of such cash transfers in ameliorating the situation of the farmers.

Directive word

Examine- here we have to probe deeper into the topic,  get into details, and find out the causes or implications if any.  

Key demand of the question.

The question wants us to dig deep into the cash transfer schemes being initiated in several Indian states and also the central budget, and bring out the reasons as to why they are not enough to solve the agricultural crisis in India.

Structure of the answer

Introduction- write a few introductory lines about the  Cash transfer schemes to Indian farmers. E.g mention the various state schemes and the announcement in the recent interim budget introduced by the centre.


Discuss in points as to why such schemes would not likely solve the agricultural crisis in the country. E.g

  • The crisis in agriculture has continued to worsen with the latest estimates of inflation suggesting that the trend of decline in farm produce prices has continued unabated.
  • Primarily because the crisis is not just of low incomes in agriculture.
  • The genesis of the current crisis lies in the faulty and ad hoc export-import policy, lack of infrastructure and cartelisation and collusion in agricultural markets, which have prevented farmers from realizing the market prices for agricultural produce.
  • It is the combination of these, along with the twin droughts of 2014 and 2015, which created the crisis in the first place.
  • It is also true that the crisis worsened due to the sudden shocks of demonetization and the hasty implementation of goods and services tax, which affected the rural economy adversely.
  • Cash transfers do nothing to resolve any of these, nor are they any guarantee of protection against unforeseen events, whether natural or policy induced.
  • It is neither a substitute for the structural reforms needed in agriculture, nor does it adequately compensate the farmer for the risks and uncertainty of crop cultivation.
  • The current crisis may have worsened due to the sharp fall in agricultural crop prices, but is finally a result of multiple failures of policy.
  • But it is also a crisis which is caused by the failure of the non-farm sector in creating enough jobs as is evident from the deceleration in real wages in rural areas.

Conclusion– based on your discussion, form a fair and a balanced conclusion on the given issue.