Government plans 70,000 crore rupee plan to pay cash to farmers, according to a report

. The government plans to transfer funds to farmers to ease their financial burden instead of providing subsidies.

The government of Prime Minister Narendra Modi plans to consolidate all agricultural subsidies, including the cost of fertilizers, and pay cash to farmers, said residents, asking not to be identified because the discussions do not are not public. The additional cost will be limited to Rs 70,000 crores ($ 9.8 billion) a year after the full launch of the program, the citizens said. Finance Minister Arun Jaitley budgeted $ 70,100 crore for farm subsidies in the year ending March 31.

Finance Ministry spokesman DS Malik did not answer two calls on his mobile phone.

The ruling party, the Bharatiya Janata Party, was eliminated in major parliamentary elections last month, forcing Prime Minister Modi to prepare a correction of his path ahead of the national poll scheduled for May. The government, which has already exceeded the annual budget deficit target, has little leeway to spend this year, after losing some of the tax revenue on goods and services after the defeat.

The additional expenditures will have no impact on the country 's budget deficit for the current year ending March 31, in the opinion of the people. The rupee and bonds rebounded after the report set the cost at a lower cost than initially estimated at more than Rs 2 million.

While the government predicted a budget deficit of 3.3% of gross domestic product for the current fiscal year, economists expect India to miss the goal for the second consecutive year, when the administration yields to populist pressures.

Prime Minister Modi, seeking a second term, must convince disgruntled farmers before the elections to suffer the consequences of falling crop prices and rising prices. Input costs, pushing thousands of between them to demonstrate in the street to ask for a debt waiver.

At the same time, the opposition Congress lobbied the government to act after giving up agricultural lending following victories over the BJP in three states last month.

Tax Room

Investors will want to know where the additional funds will come from. Although the government's small savings fund is likely to offset some of this deficit, it can turn to the Reserve Bank of India to secure additional funds in the form of an interim dividend.

"It is not uncommon to observe tax measures of social support." Andrew Wood, a credit badyst at S & P Global Ratings in Singapore, said in an email that he answered questions last week. "That said, the Indian government does not have significant budget space to work."

But the lack of fiscal targets is not a big one concern for the administration at the moment, as it weighs measures to relieve distress in the agricultural sector and fuel economic growth.

"It depends entirely on the current situation," said the Minister of Finance Arun Jaitley, in an interview with CNBC-TV18, last week. "Therefore, without going into details, because it will reveal the spirit in which we are working, some of these challenges really can not afford to wait and so it will obviously be necessary to solve them. "