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What went wrong in Irrigation subsidy program for Indian Government ?

However, in a study it shows many farmers prefer unsubsidized, cheaper drip irrigation systems even if they can avail the subsidy for high-quality ones. In that study Maharashtra’s Twenty farmers who use drip irrigation were interviewed with some local bureaucrats, retailers and manufacturers.
It is observed that growing vegetables such as tomatoes or onions can cost farmers ₹80,000–85,000 per hectare with an unsubsidized high-quality drip irrigation system. But this cost goes down to ₹24,000–30,000 with a low-quality system.

Before 2012 farmer has to pay only the part of purchase of irrigation set because of subsidies from the government and the rest amount was given to the manufacturing companies from the government.  

 But these payments often got delayed due to various reasons, hence manufacturing companies raised the prices of irrigation set. So overcome this situation government came up with a solution as, farmers now had to bear the full cost of the set, with subsidy payments paid later on into their bank account.

But these payments to farmers were also delayed, sometimes by up to two years. Also, many small farmers can not buy such a high quality & costly irrigation set and wait for 2 years for the subsidies. That’s why Banks also hesitated to give farmers loans for buying irrigation sets.
So high costs and delays in subsidies compel farmers to go for cheaper, low-quality drip irrigation sets, which are not having warranty for long term. The recently developed subsidiary scheme has solved the manufacturers problem but created a new one for farmers. 

All the three vital factors are at losses

  • Farmer– By purchasing cheap and warranty free irrigation set farmers don’t get any warranty and service from the company. While company gives 10 years of warranty on irrigation set with service to the farmer.
  • Manufacturing Companies-Cheap and non-ISI marked products are into market and farmers are going for these products. So number of customer loss is there for companies.
  • Government– Mostly people sell the non ISI / clone products into market and which can be easily get away with tax returns. Read More.
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