Welfarism and bias

Income tax rebate less justified than farm income support

Two of the major new initiatives in the interim Budget presented last week have met with sharply different reactions even though both were fiscally expansionary measures. In one, the government decided that small farmers who own less than 2 hectares would receive income support from the Union government. The amount was relatively small: Rs 6,000 annually, transferred in three instalments. Because of the fragmentation of landholding in India, the number of theoretical beneficiaries of this policy is vast — about 120 million households, according to Finance Minister Piyush Goyal. This is a significant portion of the population. The scheme would