Will the PM Kisan Scheme Impress India's Farmers? -Varun Kumar Das
The scheme is far from being inclusive and will likely exacerbate already unequal social and economic conditions.
The focal point of this year’s budget has been the announcement of a new centrally-sponsored scheme, the ‘Pradhan Mantri Kishan Samman Nidhi’ (PM-KISAN). This scheme assures small and marginal farm households a guaranteed annual income support of Rs 6,000.
However, this scheme is hardly the first instance of agricultural income support in the country. States like Odisha and Telangana have individual state-level farm income support schemes. The amount of Rs 6,000 is less than the farm income support provided by states such as those mentioned above.
Interpreting the rationale
The income support estimate of Rs 6,000 per farm household appears to be an arbitrary construct. It could be speculated that this income support is to bridge the poverty gap of small farmers. However, according to the Rangarajan report on poverty, for a family of five in a rural area, the poverty line is reflected by a monthly consumption expenditure of Rs 4,860.
This implies that this annual income support falls short of covering the Rangarajan poverty line as the monthly support under PM-Kisan is Rs 500.
If the target is not poverty alleviation, then is it aiming to battle rural indebtedness? A recent survey on financial inclusion conducted by the National Bank for Agriculture and Rural Development (NABARD) finds a burden of indebtedness at Rs 1,04,602 per agricultural household for 2016-17. Naturally, an annual income support of Rs 6,000 will not cover the average outstanding debt.
Unlike other market intervention schemes in agriculture, income support may not regulate the investment behaviour of farmers. It is still not clear if the income support of Rs 6,000 forms a part of the strategy to double farmer income by 2022. Even if it does, will giving income support amount to doubling of the income?
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