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Issues with PM Kisan Scheme | Gaps in Implementation

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)

  • The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is the first universal basic income-type of scheme targeted towards landed farmers.
  • It was introduced in December 2018 to manage agricultural stress.
  • Initially, the scheme was targeted at small and medium landed farmers, but with the declining growth in gross value added of the agricultural sector, it was extended to all farmers in May 2019.
  • The Union budget had allocated Rs 75,000 crore to this scheme in 2020-21.

PM-KISAN

Gaps in implementation:

  1. About 32% of them experienced large income losses in the month of May, which is much lower compared to the proportion among casual wage workers (73%) and business households (70%).
  2. About 20% of farm households reported no reduction in their income in May.
  3. The proportion of households that had to borrow to meet their day-to-day consumption needs during the lockdown was relatively low for the farmers (34%) compared to casual wage workers and business households.
  4. While 7% of farm households suffered from occasional unavailability of food during the lockdown, this figure was much higher for casual workers (24%) and business households (14%).
  5. In the months of April and May, 21% of 632 farm households received cash transfers through PM-KISAN.
  6. Among the recipients, around two-thirds reported receiving Rs 2,000 and about a fourth received Rs 4,000 in April and May combined, possibly because family members engaged in agricultural activities may be co-residing within a household.

Scope of protection from income shock:

  1. On the whole, when compared to non-recipients of PM-KISAN (including both farm and non-farm households), these households exhibited lower signs of economic distress.
  2. About 35% of rural PM-KISAN recipients suffered income losses to a large extent in comparison to more than half of the non-recipients.
  3. A little more than a third of PM-KISAN recipients borrowed money during this period as against 48% of non-recipients.
  4. However, these households were somewhat better off than the general rural population even before receiving PM-KISAN benefits.
  5. Thus, their relative immunity(protection) to the income shock may not be solely due to PM-KISAN.

Concerns:

  1. Two aspects of this scheme present particular challenges.
  2. First, PM-KISAN is not reaching all farmer households as intended.
    A) Most of the farmers in UP, Haryana and Rajasthan own land and should be receiving benefits. But only 21% of the cultivators interviewed reported receiving the benefit.
    B) The exclusion is greater in UP than in Haryana and Rajasthan.
  3. Second, this scheme is not pro-poor since recipients of PM-KISAN seemed to be better off than the general rural population even before the lockdown.