Farm sector doles can lead to irreversible fiscal deterioration, says former RBI governor YV Reddy
Updated : February 19, 2019 06:33 AM IST
Y V Reddy: Such ideas can lead to "irreversible fiscal deterioration" and "conflicts" between the Centre and the states, and pitched for alternatives like having an agricultural distress fund contributed by both the states and Centre, rather than the ongoing measure of arbitrary scheme announcements.
The comments come after the Centre announced income support of Rs 6,000 for every small and marginal farmer in a scheme based on a similar one announced in Telangana.
Reddy said the major concern with a scheme like income support, which will cost the exchequer Rs 70,000 crore in FY20, is the recurring nature and pointed out that this will constrain the fiscal balances.