Pradhan Mantri Kisan Samman Nidhi

Pradhan Mantri Kisan Samman Nidhi

 Context: To provide an assured income support to the small and marginal farmers, the Government has unveiled the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN).

 

About Pradhan Mantri Kisan Samman Nidhi:

1. Under this programme, vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of Rs. 6,000 per year.
2. This income support will be transferred directly into the bank accounts of beneficiary farmers, in three equal installments of Rs. 2,000 each.
3. The complete expenditure of Rs 75000 crore for the scheme will borne by the Union Government in 2019-20.

 Significance:

Around 12 crore small and marginal farmer families are expected to benefit from this. It would not only provide assured supplemental income to the most vulnerable farmer families, but would also meet their emergent needs especially before the harvest season. It would pave the way for the farmers to earn and live a respectable living.

 Similar programmes by states:

Bhavantar Bhugtan Yojana in Madhya Pradesh was sought to provide relief to farmers by providing the differential between MSPs and market prices.

The Rythu Bandhu scheme of the Telangana government provides ₹4,000 per acre for every season to all the farmers of the state. Similar initiatives have also be framed in Jharkhand and Odisha.

In December 2018, Odisha launched the Krushak Assistance for Livelihood and Income augmentation (KALIA). KALIA is more complicated in design and implementation. It commits to give Rs 5,000 per SMF, twice a year, that is Rs 10,000 a year.

 Benefits of direct cash transfers:

• It has immediate impact on reducing hunger and rural poverty.
• They can help households to overcome credit constraints and manage risk. This can increase productive investment, increase access to markets and stimulate local economies.
• Income support can be used to make a repayment or at least activate a bank account which can then receive a loan.
• It can increase investment in agricultural inputs, including farm implements and livestock.
• It can serve as an important complement to a broader rural development agenda, including a pro-poor growth strategy focusing on agriculture.

Challenges with cash transfers- criticisms:

• Landless labourers are not being covered under PM-KISAN.
• Cash transfers are not greatly superior in terms of leakages compared to other schemes of in-kind transfer such as the public distribution system (PDS).
• A targeted cash transfer scheme envisions the role of the state to only providing cash income to the poor. This kind of approach seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition and livelihood.
• Cash transfer scheme such as PM-KISAN cannot be substituted for subsidies and other institutional support systems such as the National Food Security Act-powered public distribution system. In fact, such cash transfer schemes could be counterproductive and may lead to more distress.
• Cash transfers do not solve the following problems which are the reasons for the current agrarian crisis. The Agrarian crisis is not just of low incomes in agriculture. The genesis of the current crisis lies in the faulty and ad hoc export-import policy, lack of infrastructure and cartelisation and collusion in agricultural markets, which have prevented farmers from realizing the market prices for agricultural produce.
• Cash transfer is neither a substitute for the structural reforms needed in agriculture, nor does it adequately compensate the farmer for the risks and uncertainty of crop cultivation.
• In the absence of proper tenancy records, it will also benefit the absentee landlords.
• It is no substitute for the lack of investment in agriculture, which has declined at 2.3% per annum in real terms.

Conclusion:

PM-KISAN is an ambitious scheme that has the potential to deliver significant welfare outcomes. However, the current top-down, rushed approach of the government ignores governance constraints and is therefore likely to result in failure. An alternative bottom-up strategy and well-planned implementation mechanism would allow weaknesses to be identified and rectified at the local level. The most effective modalities can then be scaled nationally and ensure success.