Modi-led government scaled up the Price Deficiency Payment Scheme (PDPS) nationally, disregarding multiple internal warnings about its vulnerability to corruption and evidence from a failed experiment in Madhya Pradesh, according to internal documents.
The PDPS, part of the PM Aasha scheme introduced before the 2019 elections, aimed to protect farmers from volatile prices of pulses and oilseeds by topping up their earnings if they fell below the government-set Minimum Support Price (MSP).
However, the scheme was implemented despite significant concerns from various states, including BJP-ruled Uttar Pradesh, which cautioned that the scheme might benefit corrupt traders rather than farmers, Reporters Collective reported.
The Union government imposed the scheme on states even though most were against it.
The scheme was initially adopted from Madhya Pradesh, where it had been scrapped within six months due to design flaws that allowed traders to manipulate prices. Internal documents reveal that Niti Aayog and a study commissioned by the Centre recommended implementing safeguards and revising the model before expanding it.
Despite these recommendations, the government proceeded without modifications, burdening states with the responsibility to address the scheme’s flaws.
Niti Aayog’s warning was particularly notable. The think tank acknowledged the scheme’s susceptibility to corruption and price manipulation by traders, and advised substantial revisions to prevent these issues. However, the government chose to proceed with the flawed Madhya Pradesh model, ignoring these warnings.
The scheme also excluded tenant farmers and capped compensation to a quarter of the farmer’s produce. States would have to bear the cost of compensating losses beyond this limit, discouraging full compensation for farmers.
The Modi government, despite public promises to double farmers’ income, showed internal uncertainty about whether it truly intended to achieve this goal. Concerns about the scheme’s impact on inflation and the clarity of its implementation further complicated the situation.
The scheme’s introduction echoes past criticisms of the Modi government’s policy-making, where policies are announced for political gains but face implementation issues.
As per the report, this pattern was evident in the swift rollout of the PDPS without addressing the flaws that led to corruption in Madhya Pradesh.
The investigation by The Reporters Collective exposes how the government’s hasty decision-making nearly allowed traders to exploit public funds. Ultimately, the scheme’s impact was mitigated not by reforms but by financial mismanagement.
The Collective reached out to the Union ministries of agriculture, farmers’ welfare, and consumer affairs for comments but received no response.
In summary, the PDPS was designed to stabilize farmers’ income by ensuring they received at least MSP for their produce. However, its implementation was marred by corruption risks and a lack of comprehensive safeguards, leading to a flawed rollout that failed to address the concerns raised by experts and state governments.