Indian government is considering to boost cash support to small farmers by a third, a move that will allow Prime Minister Narendra Modi's ruling party to gather support from a key voting bloc ahead of elections next year.
The government is weighing options to raise the annual direct cash transfer to small farmers to Rs 8,000 from Rs 6,000, two officials familiar with the discussions told Bloomberg.
The plan if approved will cost the government an extra Rs 200 billion, according to the people, on top of the budgeted Rs 600 billion for the program in the current fiscal year.
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Farmers are a crucial voting bloc with some 65 per cent of India's 1.4 billion people residing in rural areas.
The government has been making efforts to bolster income of the farmers in a year which recorded the weakest monsoon for India in five years. Since December 2018, it distributed 2.24 trillion rupees in total among 110 million beneficiaries.
People cited above said officials are now considering to relax rules to include more farmers under the direct cash transfer program.
The government is also rolling out measures to support poorer households. These include an extension of a free grains program into next year and considering subsidised loans for small urban housing.
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Last week, the cabinet approved an increase in subsidies on liquefied petroleum gas, used for cooking.
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