DBT better than farm loan waiver: SBI chief

State Bank of India Chairman Rajnish Kumar on Monday said the bank was in favour of direct benefit transfer (DBT) over farm loan waivers as it was more efficient in addressing farmers’ concerns.

He said the country was already seeing a movement towards DBT to farmers, as indicated by certain states in the recent past, along with such announcement in the interim Budget, last week.

“India is in the last leg of loan waivers. Because, as a country, India can't afford to have both farm loan waivers and DBT to farmers. I am all for DBT,” Kumar said.

“We have seen announcements of DBT schemes in states such as Telangana and Odisha. The recent Budget also has such provisions. So, I feel, the phenomenon is catching up. This is a clear trend.”

The interim Budget has provisions under which ~6,000 will be directly transferred to farmers' accounts in three tranches per year. This concept of DBT to farmers was first introduced by Telangana, in which the state promised to transfer ~4,000 to every farmer per acre of agricultural land each season, under its Rythu Bandhu scheme. Similarly, Odisha has announced to pay ~5,000 to every farmer per season as part of the Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme.

While many Indian states have seen a spate of loan waiver announcements in the last few months, DBT is preferred for its efficacy in reaching out to real farmers.