In a move to provide an assured income to the small and marginal farmers, the Modi Government on Friday announced a slew of measures, including direct income support of Rs 6,000 per year.
Presenting the Interim Budget for 2019-20, acting Finance Minister Piyush Goyal said under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), Rs 6,000 annual support will be provided to farmers with land holding of two hectare or five acre.
The new scheme will be implemented from December 1, 2018 and the amount will be paid in three installments of Rs 2000 (every four months) through direct benefit transfer. As many as 12 crore small and marginal farmers are expected to benefit from the scheme. Farmers who are sowing rabi crops during the ongoing rabi season will be benefitted from the scheme. About Rs 20,000 crore extra has been provided for the scheme in the revised estimate for the current fiscal.
The Finance Minister said, “This initiative will benefit 12 crore small and marginal farmers, at an estimated cost of Rs 75,000 crore.”
The Finance Minister said, “This programme will be funded by the Government of India. The programme would be made effective from December 1, 2018 and the first installment for the period up to March 31, 2019 would be paid during this year itself.”
Union Agriculture Minister Radha Mohan Singh hailed the Budget and termed its historic one for farmers.
The assured income support is seen as an attempt to assuage the farming community’s discontent ahead of the general elections. The direct cash transfer was one of the highly anticipated and talked about schemes in the interim Budget 2019.
The move is aimed at addressing rural distress, which was primarily blamed for the BJP’s defeat in recent Assembly elections in key States.
Having borne the brunt of a number of farmer agitations and agrarian distress in the past years in its tenure, appeasing this vast community is crucial for the BJP. The loss in three States in Hindi heartland States of Madhya Pradesh, Chhattisgarh and Rajasthan for the BJP may also be largely attributed to the farmers’ anger against the BJP. The move was widely expected due to rising agrarian distress in the country, with the Opposition repeatedly attacking the Government for failing to improve the situation of farmers who are doubly burdened by debt as well as low prices for their produce.
The Congress’s promise of farm loan waivers won them Rajasthan, Chhattisgarh and Madhya Pradesh.
PM-KISAN Yojna 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. Apart from direct income support to farmers, Goyal, in the Interim Budget for the 2019-20, also announced extended interest subsidy on loans availed for animal husbandry and fishery as well as those farmers affected by severe natural calamities.
The Union Budget also announced 2.5 per cent interest subventions for farmers struck by natural calamities. Adding to it, he announced 2 per cent interest subvention for animal husbandry and fisheries sector. The Finance Minister said, “Presently, the crop loans are rescheduled for such affected farmers and they get benefit of interest subvention of 2 per cent only for the first year of the rescheduled loan. Our Government has now decided that all farmers affected by severe natural calamities, where assistance is provided from National Disaster Relief Fund (NDRF), will be provided the benefit of interest subvention of 2 per cent and prompt repayment incentive of 3 per cent for the entire period of reschedulement of their loans.”
Presently, the crop loans are rescheduled for such affected farmers and they get benefit of interest subvention of 2 per cent only for the first year of the rescheduled loan, he added.
The limit for farm loan waiver has been doubled to 8 per cent. “For the welfare of farmers and for doubling their income, the historic decision was taken to increase MSP by 1.5 times the production cost for all 22 crops... All farmers hit by natural calamity to get interest subvention of 5 per cent,” said Goyal.
Consequently, the total Budget allocation for agriculture and allied activities is projected higher at Rs 1,49,981 crore for the 2019-20 fiscal, when compared to the revised estimate of Rs 86,602 crore for this fiscal. The fertiliser subsidy is pegged at 74,986 crore for the next fiscal as against Rs 70,075 crore. Goyal, however, did not raise the farm credit target for the next fiscal. In the 2018-19, the farm credit has exceeded the target of Rs 11 lakh crore and reached Rs 11.68 lakh crore.
A few other steps were announced by Goyal in a move to divert farmers from crops to fisheries and animal husbandry. A Rashtriya Gokul Yojana for cow protection with an allocation of Rs 750 crore was announced in the Interim Budget 2019. In addition, the Government will create a separate department for fisheries.
In Budget 2018, Arun Jaitley had proposed to raise the minimum support price for kharif season crops to 1.5 times of agri production cost-that is cost plus 50 per cent. Following the announcement, the Centre had hiked the MSP of 14 kharif crops in July.