NABARD Current Affairs - 2019
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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.
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.
The Ministry of Statistics and Programme Implementation has released the First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation, 2017-18. The highlights of the revised estimates are:
- The forecast for GDP growth for 2017-18 was increased to 7.2% from the earlier estimate of 6.7%.
- The actual growth rate in 2016-17 has been increased to 8.2% from the 7.1% estimated earlier.
The Ministry of Statistics and Programme Implementation clarifies that the revision of the estimates for 2015-16 and 2016-17 are on the account of the availability of the latest data on agricultural production, industrial production, government expenditure (replacing the Revised Estimates with Actual for 2016-17) and also more comprehensive data available from various source agencies like the MCA and the NABARD and State/Union Territory Directorates of Economics and Statistics.
Criticisms against the Revision
The Economists criticise the revision because of the following reasons:
- The numbers do not match up to the ground realities.
- The data corresponding to the demonetisation year of 2016-17 shows strong growth in sectors that were widely agreed to have been badly hit by the exercise.
- The main factor for the revision was the increase in private final consumption expenditure which was increased by 1 percentage point. This was inconsistent with the idea of people having less cash to make purchases.
- The other main driver of the upward revision was the construction sector which was revised upwards by 4.7 percentage points. The earlier analyses had indicated that construction which has a large informal sector component was adversely affected similar to other informal sectors due to demonetisation.
- Other drivers for the upward revision in 2017-18, mining and quarrying sector and the public administration sector had data that is compiled by the government itself. Hence they should not have undergone such a vast revision. .
With 2019 being a election year, critics also cry foul play on part of the government to project a happy picture before the general elections.
Tags: agricultural production • government expenditure • Industrial production • mining and quarrying sector • Ministry of Statistics and Programme Implementation • NABARD • public administration sector • Revised Estimates