On the PM-Kisan Scheme – Not the way forward

Source: This post on the PM-Kisan Scheme has been created based on the article “On the PM-Kisan model: Not the way forward” published in “Indian Express” on 30^th December 2023.

UPSC Syllabus Topic: GS Paper 3 Agriculture – Issues related to direct and indirect farm subsidies.

News: The article discusses the significant features of the PM-Kisan scheme. It suggests the reforms that can be undertaken in the scheme to make it better for Indian farmers.

The Government is undertaking a drive to increase the total number of farmer-beneficiaries under the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), from the current 8.12 crore to about 8.75 crore.

What are the significant features of the PM-Kisan scheme?

PM-Kisan’s is a direct income support (DIS) programme. Its significant features include:

1. Not dependent on Crops Grown: This payment is irrespective of which crops she grows in whatever quantities and sells to whomsoever at any price.
2. Not dependent on the Inputs Used: The payment is also indifferent to inputs used, whether chemical fertilisers and insecticides or organic manure and biological control of pests and diseases.

Thus, it’s a subsidy that is not market-distorting or encouraging chemicals-based agriculture (as against natural farming).

What are some changes that can be made?

Within the overall framework of PM-Kisan, certain refinements can be made:

1) Income Support on a Per-Acre Basis: For instance, Telangana government’s Rythu Bandhu scheme provides farmers up to Rs 12,000 per acre per year.

2) Upper Limits on the Per-Acre Payment: The payment under PM-Kisan can be made on a per-acre basis up to a limit of, say, 10 acres. This would address concerns over large landowning farmers getting a higher amount compared to poor farmers with less land.

3) Additional Payment by State governments: State governments can top up the amount under PM-Kisan with an equivalent income support (as a per-acre transfer).

Where will the provisioned money come from?

According to the author, the money for moving from per-farmer to per-acre payments can come from the following sources:

1) Savings from ending all market-distorting subsidies: This includes subsidies on farm inputs (fertiliser, electricity and water) or output (procurement of grain at MSP beyond necessary stocking requirements).The savings can be redirected towards PM-Kisan.
For e.g. the Centre’s fertiliser subsidy (around Rs 1,75,100 crore), if distributed among the 8.75 crore beneficiaries, would work out to over Rs 20,000 per farmer.

2) Additional savings from similar inefficient and environmentally-disastrous subsidies by states.

For more information regarding Issues with Farm Subsidies in India, read here.

Question for practice:

What are the significant features of the PM-Kisan scheme? Analyse its impacts on Indian agriculture and suggest steps to make it better for Indian farmers.