‘Pradhan Mantri Kisan Samman Nidhi’ (PM-KISAN) Easy understanding
Agri Politics

Making PM-KISAN, new Income Support Scheme a successful model

It is an open secret that targeting beneficiaries for Government services, subsidies and relief packages is a greatest challenge with this 133 crore populated country. Point out any scheme or welfare measures in India, inclusion and exclusion errors is inevitable. This makes slogans from ‘Garibi Hatao’ to ‘Achae din’ lie bootless as mere rallying cry. But government efforts to single out intended beneficiaries is also a continuing process, thanks to Aadhaar, Jan Dhan accounts, MGNREGA and digital technologies.

To knockdown such errors in Government benefit transfer, new concept of Universal Basic Income was put forward by Economic survey 2016-17. This intends to transfer unconditional basic income directly to Aadhaar linked – bank accounts of individuals. This idea was put forward by the then Chief Economic Advisor, Arvind Subramanian.

‘Pradhan Mantri Kisan Samman Nidhi’ (PM-KISAN) Easy understanding
To knockdown such errors in Government benefit transfer, new concept of Universal Basic Income was put forward by Economic survey 2016-17.

But due to various limitations in fiscal space and the populist nature of Indian political system, he came out with another new proposal called ‘Quasi-universal basic income’ (QUBRI) for farmers. It is proposed to transfer Rs. 18,000 per year to each rural household, except those which are ‘demonstrably-well off’, at an estimated cost of Rs. 2.64 lakh crore to tackle agrarian distress among others. One could co-relate this proposal with Indian National Congress Party President Rahul Gandhi’s mega poll promise of providing a guaranteed minimum income to the poor in all states.

Not to miss the chance, Finance Minister Piyush Goyal has announced in his interim budget (2019) ‘Pradhan Mantri KIsan Samman Nidhi’ (PM-KISAN) under which Rs. 6000 per year would be provided to farmers holding cultivable land of upto 2 hectares. Though the scheme has been emanulated from income support schemes of states Odisha and Telangana, it has failed to either learn the failures or replicate the success.

Not so new

First the income promised under PM-KISAN is lower than the schemes implemented by these two states. The Rythu bandhu scheme of Telangana offers Rs. 4,000 per acre per farmer each season, While  Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme of Odisha offers transfer of Rs.25,000 per farm family over five seasons to small and marginal farmers.

Second, PM-KISAN is again prone to exclusion and inclusion errors. Though Rythu Bandhu scheme has done extensive land record digitisation work before implementation, it still excludes tenant farmers. Land record is only available option to identify beneficiaries. This might keep tenant farmers, women farmers, landless agricultural labourers out of this scheme. Recently, centre has written to all states directing them to quickly identify small and marginal farmers for receiving Rs.2000 as first installment by March (2019) end. This hurried decision by keeping election in mind without any ground work for identification of beneficiaries will certainly outlive its purpose, as most states do not have any credible database farm land holdings.

PM KISAN comparison with other schemes
PM-KISAN lies down in table as yet another government scheme to pacify farmers for elections. ; Image credits: Getty images

A better option ?

Moving away from its implementation challenges, Income Support poses a better option than price support as it would not adversely affect the market. Prof. M.S.Swaminathan added that it will enable farmers to purchase inputs needed for a technological upgrading of farm operation. “PM-KISAN 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. PM-KISAN would pave the way for the farmers to earn and live a respectable living.” Finance Minister said about the programme in his budget speech.

Despite its own benefits, it lies down in table as yet another government scheme to pacify farmers for elections. What could be done to fulfill its objectives of raising income security of rural agrarians ?

One, establish foolproof database that will identify vulnerable agrarians like women farmers, tenants and agricultural labourers. In states where land record holdings are not updated, secondary information sources from beneficiaries of soil health card, PM-KISAN Sampada Yojana and those opted for formal credit shall be utilized. Moreover state government should play a proactive role in identification through digital land records by adapting best methods of Karnataka and Telangana.

Second, the  income support scheme should be integrated with income security scheme, i.e., Price support systems like Minimum Support Price (MSP) and Price Deficiency payment. Widen the scope of MSP to maximum commodities based on calculations of M.S Swaminathan which is 50 per cent margin over Cost C2. Further, database available with PM-KISAN could be used to transfer deficiency payments and also insurance premium under PM-Fasal Bima Yojana. Further Soil Health card could be made mandatory for PM-KISAN beneficiaries. This would ensure soil fertility and sustainable agriculture.

Third, the very purpose of basic income as discussed earlier is to replace subsidies that has inbuilt inclusion and exclusion errors. But as per the information, PM-KISAN would continue with other subsidies and schemes. States should at least try to gradually replace electricity subsidies and fertilizer subsidy and transfer that saved amount as direct benefit to beneficiaries account with PM-KISAN income support. It would not only increase income per household but also lead to crop diversification to less water intensive crops and leakages.

For a long term solution, improving supply chain, establishing agro-processing zones for value addition and reduction in post harvest losses, creating a better logistic platform and enabling better price realization by market reforms are viable solutions for chronic agrarian distress in India.

So, the success of new PM-KISAN depends on its implementation and integration with other schemes.

Also read key takeaways of Budget 2019 in Agriculture sector and farmers welfare ! Click here

Ramsundar, Horticulture graduate is the Co-founder and Editor-in-Chief of 'IMoT Agri Forum'. He created new style in Agriculture blogging by penning on series 'Agri Politics'. The series discuss Agri policies and actions of Indian Government in a pragmatic way with constructive criticism. He is also a freelance journalist, tutor, self published author and avid traveller. Reach him at editor@imotforum.com