PM KISAN scheme–both sides of the story

Imagine a farmer having half acre of land getting Rs 6000!!!

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The primary source of livelihood of about 58% of India’s population is agriculture. No government scheme can afford to aspire for the low hanging fruit in an agrarian society like ours. PM KISAN is an ambitious goal set by GoI, but the trepidation is– will a sum of Rs 6000 per annum be enough for a poor farmer? Will it help towards achieving the goal of doubling farmer’s income by 2022?

This article attempts to analyse the PM KISAN scheme, its benefits and possible flaws that might hinder the benefits that farmers derive from it.

PM KISAN scheme envisages to directly transfer Rs 6000 per year to marginal/small farmers, who own up to 2 hectares of land. Provision of Rs 75000 crores has already been made in the interim-budget, 2019.

The first counter argument is targeted at the amount that’ll be provided under this scheme. A week ago Mr Rahul Gandhi had called the amount of Rs 6000 per annum to a farmer, an insult , as this amount is equivalent to Rs 500 per month~ Rs 17 a day or just Rs 3 per person per day in a family of 5. To begin with the argument is impetuous, as one can go on dividing Rs 6000 by any number to reduce the amount and to present it as paltry. The point that naysayers missed due to their paucity of knowledge in the field of agriculture is—this amount is the “Startup [Seed] money”, an amount with which a farmer will start his cultivation. Farmers in India sow only twice in an year– Rabi and Kharif seasons mainly, so objective here is to support the farmers and not to make them completely dependent on the government. The pith of it is– if you want to help a man catch fish, then don’t give him fishes, instead teach him to catch the fishes.

Modi government is targeting 12 Crore farmers who are living in poverty, so a sum of Rs 6000 is aimed at augmenting a marginal farmers’ income. The government hasn’t envisaged to provide any basic income to the marginal farmers vis-a-vis this scheme. Had the amount been greater, the burden on the fiscal deficit would have had increased exponentially, and would have made difficult for the government to rein in fiscal slippage in the coming years. India has just started to accrue benefits from the implementation of GST and the revenue collections are still volatile. Thus, it would be imprudent to allocate a higher amount to these schemes until the revenue collection stabilizes.

Secondly, a colossal mistake that people make while construing this scheme is, to look at it from the lens of cash-transfer, whilst ignoring the fact that KISAN scheme is but a part of many schemes rolled out by the government for the welfare of the farmers and the poor. It is reminiscent of the Aristotle’s quote ‘whole is greater than the sum of parts’. When we take into account the benefits that farmers derive from the sister schemes, we find that the Rs 6000 direct transfer would definitely help marginalized farmers to some extent, if not to a great extent.

PM KISAN scheme will work in tandem with the following schemes:

  • PM Gram Sinchai Yojana: It aims to irrigate the field of every farmer, and to improving water use efficiency to achieve the motto `Per Drop More Crop’. It’ll cover about 28.5 lakh hectare area under irrigation and Rs 50000 cr has been earmarked for this.
  • PM Krishi Vikas Yojana (PKVY): The scheme aims to motivate groups of farmers to take up organic farming.
  • KISAN credit cards: It aims at providing timely and adequate credit to farmers to meet their production credit needs (cultivation expenses).
  • e-NAM : This has integrated 585 markets across 16 states and 2 Union territories. More than 164.53 lakh tonnes of farm commodities have been transacted on e-NAM and more than 87 lakh farmers have been registered. Thus, it is cutting down the middlemen in agriculture trading to facilitate farmer with his due
  • PM Fasal Bima Yojana: 1.5 Times (150%) Increase in Minimum Support Price for 22 Crops. 2.5% Interest will be paid by Govt in case of crops are destroyed by Natural Calamities
  • 2% Interest on loans will be paid by Govt for fisheries and animal husbandry sector, 3% in case amount is paid in time.
  • Govt has revived defunct fertilizer plants which has helped in increasing Urea production and distribution. Ensuring 100% neem coating of Urea, has helped in improving the soil quality too.

Add to this the fact, that farmer’s security-free loan limit has been raised by 60% in the interim budget,2019. Such collateral-free loans help small and marginal farmers, who do not have any assets that can be offered as security.

The other welfare schemes that have already been implemented by GoI are:

  • Rs 5 lakh for Rural Housing
  • Free healthcare facilities under Ayushman Bharat
  • Rs 5 Lakh Life Insurance
  • PM matru vandana yojana which provides cash incentives to pregnant mothers. It aims at improving health seeking behaviour amongst lactating and pregnant women.
  • PM jan arogya yojana, which provides Rs 500,000 per year to a poor family.
  • Free Education for their Children under Sarva shiksha abhyan.

Welfare is not just contingent upon the benefits derived from income transfers, it includes health care, education, and sanitation etc. It is a commendable decision by the government to bear the additional expenses, and thus relieving the poor from the burden of basic expenses that in general circumstances would have been borne by them, under the direct cash transfer policy.

Capper is, after the release of the interim Budget 2019, there is spurt in the polemical articles written by eminent economists, who through their articles are assiduously trying to prove that the PM KISAN scheme is irrelevant, and is merely a populist measure to appease the voters ahead of the elections, and thus should be confined to trash-bin. These articles evince that most of the analysis is not just biased but is also irrational. Visceral hatred for the current dispensation has clouded the ability of many to scrutinize this scheme from a neutral standpoint. Most of these economists had earlier extolled Rahul Gandhi for his positive view on Minimum Income Guarantee scheme. In reality, if Rahul Gandhi’s scheme was to be implemented then the poor in the country will be forced to choose between minimum income guarantee and the existing welfare schemes. According to economic survey 2016-2017, even if Rs 12000 were to be paid to every rural household then the fiscal cost will be 11% of the GDP.   Unfortunately, this scheme has been promoted by many economists as an oxytocin induced bliss to the Indian economy, when it clearly isn’t. Such bias vitiates the image of the ‘economist community’ on the whole.

Au contraire, PM KISAN’s shortcomings are tenable. Yes, initially it would not help landless labourers and sharecroppers, but success is bound to follow if it is implemented well by identifying the beneficiaries. Presently, land records are not digitized across India, also an updated database of functional bank accounts for transferring the amount is a prerequisite. These might hinder the implementation of PM KISAN. Therefore, Modi government will have to do good amount of elbow grease, and take an avant-garde approach to execute this scheme. But eventually PM KISAN will radiate mirth among the marginal farmers and uplift their living conditions.

This article is co-authored by Levina & Red Devil

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of SatyaVijayi.

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