It is not only an income-support programme but also an essential welfare measure achieving progress on other fronts
The 12th installment of the income support scheme, Pradhan Mantri KIsan SAmman Nidhi (PM-KISAN), of the Central Government is expected to be credited before onset of the Rabi season. So far a total of Rs 2 lakh crore has been released directly to the bank accounts in the last three years since inception. It is first-ever direct benefit transfer (DBT) measure for such a large population and also to farmers. The scheme aims to supplement the financial requirements of farmers in procuring various inputs to ensure proper crop health and to ensure appropriate yields, commensurate with the anticipated farm income at the end of each crop cycle.
Although the major objective of the scheme is to provide additional income support, overall impact of the income-support intervention is much beyond the benefits to farmer lives and rural prosperity. Also, PM-KISAN goes beyond monetary and fiscal measure to stimulate the economy which is often hit by sluggish rural demand. Therefore, PM-KISAN is not only an income-support programme but also an essential welfare measure achieving significant progress on other fronts as well.
It is pertinent to be aware about the ripple effect of the programme in general and farmer’s welfare in particular.
The significance of PM-KISAN is much broader than anyone could expect. First, the PM-KISAN implementation and the issues associated with it shall incorporate factors that essentially signal the success and the failure. The inherent multiplier effect also adds to the whole governance process, people’s participation, and development as a result of introducing a scheme affecting large section of society.
In addition to encouraging farmers to invest in productive capital asset and human resource development as a result, it shall have an impact on farming and technology adoption by the farmers.
Second, the Reserve Bank of India spends significant sum on the financial inclusion and enhance banking habits of people, yet only 40.1 per cent of small and marginal farmers are financially inclusive. In rural areas, after the PM-KISAN launch, banking habits of people have significantly improved and their curiosity to learn about financial products have also seen considerable jump. Thus financial inclusion of the large sections of the agrarian society is going without much noise.
Third, it was observed over the years that the key government programmes often subject to elite capture and selection biases. PM-KISAN, with the robust DBT network, has necessarily shunned away the bias associated with the programme implementation. Negligible amount of bias is associated in other interventions with respect to of social, economic, and agricultural characteristics. Indeed PM-KISAN is a resolve for the quote made by the former prime minister Rajiv Gandhi ‘only 15 paisa of every rupee’ meant for welfare of downtrodden reaches the beneficiary.
Fourth, research findings suggest that more than half of the amount credited to the farmer beneficiary of the PM-KISAN is spent on agriculture, either meeting current expense or investment (if transferred during sowing season). When the private investment in agriculture, especially corporate investment, is low, assured income support to farmers can influence to bring in corporate investment in agriculture.
Enhanced spending ability for the agriculture sector by farmers with support from PM-KISAN is changing the way the marketing of agriculture inputs is being done and has reduced the dependence on moneylenders.
Fifth, the amount paid to the farmers is often stated to be inadequate, but the amount paid under the scheme is significant sum from the point of view of small and marginal farmers and also from point of rainfed farming across agro ecological zones while easing them with liquidity constraints affected by variable cost of inputs. One has to look income support through PM-KISAN beyond the prosperous farmers and states of the country.
For small and marginal farmer of Bihar, Jharkhand, Odisha, and North-Eastern states, the amount paid under PM-KISAN saves the cost of cultivation anywhere between the 20-50 per cent and also the saving happens as a result; it can be sourced to invest in adoption of modern technology. Initial study of IFPRI in Uttar Pradesh states that PM-KISAN has increased the adoption of improved paddy cultivars from 4-15 per cent. This shows that the additional effects that PM-KISAN is impacting the whole agriculture system is huge and needs coveted research.
Of course, inclusion of tenants (without jeopardising the land owner’s rights) and leasee and landless farmers remains an issue. It would also call for assessment of the PM-KISAN programme with other major government programmes, viz., MGNRGS, PMKSY, food grain procurement on the improvements in the agriculture sector wherein inclusion of small farmers from marginalised environments and rainfed ecologies are mainstreamed.
(The author is Member [Official], Commission for Agricultural Costs & Prices. Views are personal)