Background/Objective: The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and Rythu Bharosa schemes provide direct income support to farmers in India. This study examines the utilization patterns of scheme benefits among marginal and small paddy farmers in Guntur district, Andhra Pradesh, focusing on expenditure allocation across agricultural and non-agricultural purposes. Understanding how beneficiaries utilize these funds is essential for assessing scheme effectiveness and designing targeted interventions. Methods: A cross-sectional survey was conducted among 640 farmers (320 marginal and 320 small farmers) selected through stratified random sampling from four mandals (Ponnur, Kakumanu, Duggirala, and Tenali) in Guntur district. Primary data were collected using a structured interview schedule covering socio-economic characteristics and utilization patterns across sixteen expenditure categories. Data analysis employed descriptive statistics including frequency distributions, percentages, and means. Chi-square tests were conducted to examine associations between farmer categories and utilization patterns. Results: Results revealed that 84.40% of sample farmers reported being indebted, with average annual incomes between ₹1,50,000-₹2,50,000 (55.90%). The scheme amount was primarily utilized for household expenses (85.90% significant utilization), clearing small debts (79.20%), and agricultural wages (77.70%). Complete utilization was reported for land preparation (51.60%) and harvesting support (42.80%). However, utilization for irrigation (68.90% no utilization), pesticides (30.00% no utilization), and non-agricultural assets (86.10% no utilization) remained minimal. Significant variations existed across mandals in utilization patterns (p<0.001). Conclusions: The PM-KISAN and Rythu Bharosa schemes serve dual purposes of supporting immediate agricultural needs and alleviating household financial distress among marginal and small farmers. While the schemes effectively support basic farming operations and debt management, limited utilization for productivity-enhancing inputs suggests the need for complementary extension services and financial literacy programs. Policy interventions should focus on increasing financial assistance amounts, providing targeted guidance on optimal fund utilization, and integrating the schemes with agricultural extension services to maximize productivity impacts.