BHUBANESWAR, India – The state government of Odisha has approved a sweeping set of policy changes designed to decentralize its food procurement system, increase direct financial support to farmers, and provide tax relief to rural workers. These significant Odisha cabinet decisions, announced Friday, aim to enhance transparency and empower local communities, directly impacting millions in the agrarian and forest-dwelling populations of the eastern Indian state.
The reforms, approved in a meeting chaired by Chief Minister Naveen Patnaik, shift key responsibilities for paddy procurement to village-level governing bodies. The cabinet also sanctioned an increase in financial assistance under a major farmer welfare scheme and removed the Goods and Services Tax (GST) on the trade of Kendu leaves, a vital source of income for many tribal communities.
Odisha Empowers Local Bodies with Food Policy Control
| Key Policy Change | Detail | Stated Goal |
| Food & Procurement Policy | Gram Panchayats (village councils) are now empowered to supervise paddy procurement operations at local centers. | Increase transparency, reduce distress sales by farmers, and improve accountability. |
| Farmer Support (KALIA) | Financial aid under the KALIA scheme increased from ₹4,000 to ₹6,000 annually per eligible family. | Provide greater financial security to small and marginal farmers for cultivation expenses. |
| GST Exemption | The 18% GST on the trade of Kendu (Tendu) leaves has been abolished. | Boost the income of over 800,000 pluckers, binders, and seasonal workers, primarily from tribal communities. |
Decentralizing Power with a New Food and Procurement Policy
In what officials describe as a landmark move toward grassroots governance, the cabinet approved the “Food and Procurement Policy for Kharif Marketing Season 2025-26.” The policy’s most significant feature is the empowerment of Gram Panchayats, the lowest tier of rural self-governance in India. These village councils will now form sub-committees to oversee operations at local paddy procurement centers, known as mandis.
“This is a fundamental shift from a top-down to a bottom-up approach,” a senior official in the Food Supplies & Consumer Welfare Department, who was not authorized to speak publicly, told reporters. “By involving local representatives directly, the government aims to curb irregularities and ensure farmers receive their minimum support price in a timely manner.”
For decades, the state-run procurement system has faced challenges, including accusations of mismanagement and exploitation of farmers by middlemen. According to a report from the Orissa Post, distress sales, where farmers are forced to sell their produce below the government-mandated price, have been a persistent issue. The new policy tasks Gram Panchayat sub-committees with monitoring the process, verifying farmer identities, and ensuring fair practices at the point of sale.
Bolstering Farmer Support Ahead of Planting Season
The cabinet also moved to increase financial assistance under its flagship Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme. Eligible farming families will now receive an annual assistance of ₹6,000 (approximately $72), up from ₹4,000 ($48), disbursed in installments to help with the purchase of seeds, fertilizers, and other agricultural inputs.
This enhancement in farmer support is intended to provide greater financial stability to the state’s most vulnerable agricultural households. “The increased aid directly addresses the rising costs of cultivation,” said Dr. Anjali Das, an agricultural economist at the Odisha University of Agriculture and Technology. “For a small or marginal farmer, this additional amount can be the difference between securing a quality crop and falling into debt.”
First launched in 2018, the KALIA scheme has been a cornerstone of the state government’s agricultural policy, providing aid to millions of cultivators, sharecroppers, and landless agricultural laborers.
Tax Relief for Kendu Leaf Trade
In a move with significant economic and social implications, the cabinet approved a proposal to waive the 18% GST exemption on the processing and trading of Kendu leaves. Often called the “green gold” of Odisha, these leaves are used to wrap traditional hand-rolled cigarettes known as bidis.
The Kendu leaf trade is a primary source of livelihood for more than 800,000 people in the state, many of them tribal women who work as pluckers and binders. According to a report by Down To Earth, these workers are among the most economically marginalized groups in the state.
The government stated that removing the GST would pass on financial benefits directly to this workforce, increasing their seasonal incomes. The state exchequer will forego an estimated ₹14 crore (approximately $1.7 million) in annual revenue, a figure officials called a necessary investment in social welfare.
“This is a pro-people, pro-farmer, and pro-poor decision,” stated a press release from the Chief Minister’s Office. “The government is committed to strengthening the livelihoods of every section of society.”
The implementation of these policies will be closely watched in the coming months, particularly the new procurement system as the Kharif harvesting season begins in November. Observers note that while the Odisha cabinet decisions are progressive on paper, their success will depend entirely on effective execution at the village level and ensuring the financial benefits reach their intended recipients without bureaucratic hurdles.
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FAQ
1. What is the KALIA scheme?
The Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme is a welfare program by the Government of Odisha. It provides direct financial support to small farmers, sharecroppers, and landless agricultural laborers to help with farming expenses and improve their livelihoods.
2. Why is paddy procurement a major issue in Odisha?
Paddy is the primary crop in Odisha. The procurement process, where the government buys paddy from farmers at a Minimum Support Price (MSP), is critical for farmer income. Issues like delays, corruption, and middlemen have historically plagued the system, often forcing farmers to sell their produce at lower prices.
3. What is the significance of Kendu leaves in Odisha?
Kendu leaves are a major non-timber forest product in Odisha and are used to make bidis. The trade provides crucial seasonal employment to hundreds of thousands of people, especially in tribal and rural areas, making it a vital part of the state’s rural economy.
