India announces $10.5 billion farmer income scheme

NEW DELHI:  India´s government announced Friday a $10.5-billion scheme to help crisis-hit farmers, seeking to boost support ahead of a tough re-election bid by Prime Minister Narendra Modi.

Thousands of farmers hit by low produce prices, crippling debt repayments and volatile weather have killed themselves in recent years. This and rising joblessness have hit Modi´s popularity.

The new scheme, part of the current government´s last interim budget before the election, will give 120 million "small and marginal" farmers direct annual handouts of around 6,000 rupees ($85).

"This amount will be transferred directly to bank accounts of farmers in three equal instalments," Piyush Goyal, interim finance minister, told a raucous session of parliament in New Delhi.

The programme will be fully funded by the central government, Goyal said.

The crisis in Indian agriculture and rising joblessness are emerging as key factors ahead of the elections due by May, when Modi will run for a second term.

On Thursday the Business Standard published what it said was an official report buried by Modi´s government showing unemployment at a 45-year high.

Modi and his Hindu nationalist Bharatiya Janata Party (BJP) swept to power in a landslide in 2014, promising to create millions of jobs.