Pradhan Mantri Kisan Samman Nidhi (PM-KISAN scheme)

Ministry of Agriculture and Farmers Welfare

About:

• Pradhan Mantri Kisan Sammann Nidhi (PMKSN) is an initiative by Ministry of Agriculture and Farmers Welfare
• PM-KISAN scheme was first implemented as the Rythu Bandhu scheme by the Government of Telangana where a certain amount was handed directly to the eligible farmers
• In this scheme all farmers will get up to ₹6,000 per year as minimum income support.
• The initiative was announced during the 2019 Interim Union Budget of India on 1 February 2019.
• The scheme has cost ₹75,000 crore per annum and has come in effect from December 2019.  
• ₹6,000 per year will be paid to each eligible farmer in three instalments and will be deposited directly to their bank accounts.

Objectives of PM-KISAN scheme

Pradhan Mantri Kisan Samman Nidhi Yojana is implemented as a central sector scheme by the Government of India. This scheme was introduced to augment the source of income of many small and marginal farmers. The main objectives of the PM-KISAN scheme are mentioned below:

• To provide income support to all eligible land-holding farmers and their families.
• PM-KISAN scheme also aims to supplement the financial needs of the farmers in procuring various inputs to ensure proper crop health and appropriate yields, commensurate with the anticipated farm income.
• The scheme is expected to increase the coverage of PM-KISAN to around 14.5 crore beneficiaries. It aims to cover around 2 crores more farmers with an estimated expenditure of Rs. 87,217.50 crores that will be funded by the Central Government.

Eligibility to avail benefits under PM-KISAN scheme

Any small or marginal farmer should not fall under the following criteria to be eligible under the Pradhan Mantri Kisan Samman Nidhi Yojana. Below are some of the categories of beneficiaries who are not eligible for benefit under this scheme:

1. Any institutional land-holders.
2. The farmer as well as any member of the family belonging to the following categories:
3. Former and present holders of constitutional posts
4. Former and present Ministers/ State Ministers
5. Former or present members of LokSabha/ RajyaSabha/ State Legislative Assemblies/ State Legislative Councils
6. Former and present Mayors of Municipal Corporations
7. Former and present Chairpersons of District Panchayats.
8. Any serving or retired officers as well as employees under the Central/ State Government Ministries /Offices/Departments.
9. All retired pensioners who get a monthly pension of Rs.10,000/-or more and belonging to the above category.
10. Any individual who paid their income tax in the last assessment year is not eligible under this scheme.
11. Professionals like Doctors, Engineers, Lawyers, Chartered Accountants, and Architects registered with Professional bodies and carrying out profession by undertaking practices.

Advantages of PM-KISAN

• Easing Liquidity Constraints: India, more than half of the farming households do not have access to formal credit.
  • In such a situation, PM-KISAN eases liquidity constraints of farmers for procuring inputs.
  • This is extremely pertinent in India, as more than 50% farmers rely on informal credit and one-fifth farmers purchase inputs on credit.
  • Producer support in India is very low compared to the other countries and the scheme will help in supplementing that.

• Aiding Modernisation: While the scheme is pitched as a general cash transfer scheme for the farmers, its role in the adoption of modern technologies remains an important contributing factor in modernization of agriculture.
  • Moreover, the scheme has significantly stimulated the Krishi Vigyan Kendra’s impact on the adoption of modern cultivars.

• Turning Farmers Competitive: Cash transfer increases the net income of farmers and thus, in turn, may enhance farmers’ risks-taking capacity, leading to undertaking riskier but comparatively productive investments.

• Non-Discriminatory in Nature: There is no selection bias in choosing the PM-KISAN beneficiaries based on attributes like caste and land size.

Issues That Needs To Be Addressed

• Ad-hocism: Ad-hoc export and import policies, lack of infrastructure, and uncertainty in agricultural markets have adversely affected agricultural productivity and stability of farm incomes.

• Inadequate Support: The merit of cash transfers over loan waivers and subsidies lies in their potential greater efficiency in enabling poor households to directly purchase the required goods and services as well as enhance their market choices.
  • Given that India’s poverty line is ₹32 per person per day in rural areas and ₹47 in urban areas, according to the Rangarajan Committee, the income support of ₹17 a day for a household, which is the amount offered by PM-KISAN, is largely insufficient for even bare minimum sustenance of vulnerable farmers.

• Volatility of Markets: Due to the volatile market and price fluctuations in different regions, it is important to index the cash transfers to local inflation.
  • Also, the failure of Direct Benefit Transfer in kerosene in Rajasthan is a case in point, where the cash transferred to families has been insufficient to purchase kerosene, as the market price increased substantially.

• Lack of Grievance Redressal Mechanism: The scheme does not provide a clear design of transfers and a framework for effective grievance redress.
  • For example, in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), for instance, State governments still struggle to resolve complaints and curb corruption.

Way Forward

• Raising Economic Support: The impact of a welfare measure such as PM-KISAN can only be realised through financial support that provides farmers with adequate purchasing power to meet their daily basic necessities.
  
  • Therefore, to be effective, any cash transfer scheme should first ensure that there is enough cash provided to help bring an affected community out of poverty.
  • For instance, the Rythu Bandhu in Telangana provides ₹4,000 per acre to each farmer in each season, and the Krushak Assistance for Livelihood and Income Augmentation scheme (KALIA) in Odisha offers a direct cash transfer of ₹5,000 for a farm family over five seasons, among other benefits.

• Technology Choices for Farmers: It is realised that the adoption of technology for resolving liquidity issues is just one cog in the wheel.
  
  • Knowledge and extension support is also needed to bring about adoption.
  • Investing more in agricultural advisory services, the government can encourage farmers to invest some or all part of the income support in productive assets for achieving the multiplier effect of PM-KISAN.

• Back-end Support: The scheme needs back-end infrastructure and institutions in place to be effective.
  • Adoption of modern technologies is one of the most promising strategies to increase farm incomes.
  • Also, an alternative bottom-up strategy and well-planned implementation mechanism should be identified and implemented at the local level.
  • The most effective modalities can then be scaled nationally and ensure success.

Source: PIB