PM Kisan Samman Nidhi

The interim budget 2019 has announced a farm income support scheme PM Kisan Samman Nidhi (PM-KISAN). The features of the PM Kisan Samman Nidhi scheme are:

  • The Centre will transfer Rs 6,000 every year to small and marginal farmers.
  • The scheme will cost Rs 75,000-crore to the exchequer.
  • The scheme aims to address unrest among cultivators who have suffered due to adverse weather and weak prices.
  • Rs 6,000 will be transferred directly into the bank accounts of the beneficiary farmers in three instalments of Rs 2,000 each.
  • The scheme will benefit 120 million farmers with cultivable land of up to 2 hectares.

Analysis of the Scheme

The promised transfer of Rs 6,000 every year amounts to an average of Rs 500 per month. The National Bank for Agriculture and Rural Development (Nabard) in its rural financial inclusion survey 2015-16 had estimated farmer’s average monthly income from cultivation at Rs 3,140 in its rural financial inclusion survey 2015-16. Therefore income support of an average of Rs 500 per month comes out to be 16% of a farmer’s average monthly income from cultivation.

Estimated farmer’s average monthly income

For the most marginal farmer with 0.01 hectare, the cash transfer is comparable with the estimated monthly income of Rs 566 from cultivation, but it is relatively less attractive for those with more land.

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