After being sworn in for a historic third term as Prime Minister Narendra Modi signed his first official document authorising the release of the 17th instalment of the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme.

This instalment is set to benefit 9.26 crore farmers, distributing approximately ₹20,000 crore.

For the flagship scheme to be effective, ongoing supervision and improvement are essential. State and Union Territory governments play a key role in identifying beneficiaries and ensuring their accurate and verified data is uploaded to the PM-Kisan portal. To date, more than ₹3.24-lakh crore has been disbursed to over 11 crore beneficiary farmer families through 17 instalments.

However, enhancing the scheme remains a significant challenge. According to the 2015 agricultural census, India has 14.5 crore agricultural holdings, with 85 per cent (12.5 crore) being smaller than two hectares. The government equates the number of holdings with the number of farmers, intending that all 14.5 crore farming families receive ₹6,000 annually. This would require a budgetary allocation of ₹87,000 crore, or ₹75,000 crore for just the 12.5 crore small and marginal holdings.

Over the years, both the number of beneficiaries and the Budget allocation for the PM-Kisan scheme have shown a declining trend, affecting its reach. After peaking at 10.45 crore between the 6th-11th instalments, the number of beneficiaries dropped to eight crore by the 12th instalment.

This decrease may be due to stricter verification processes but also suggests that many eligible farmers might not be receiving benefits. The scheme’s Budgetary allocation too fell from ₹75,000 crore in 2019-20 to ₹58,254 crore in 2022-23. This underutilisation of funds indicates inefficiencies in disbursement and administration.

The decline in beneficiaries and reduced Budget allocations underscore challenges in fully supporting farmers. To date, actual beneficiaries of PM-Kisan have not exceeded 60 per cent of the 12.5 crore farmers owning up to two hectares, far short of the entire farming community of 14.5 crore.

This highlights the need for a precise definition of “farmers” to ensure the scheme’s effective implementation. It is crucial for both Central and State governments to clearly define eligibility and adjust the scheme accordingly.

Lifeline for farmers

Input subsidies in agriculture have now started affecting sustainability, contributing to soil degradation and water pollution. For sustainability, it is vital to shift from price-based policies to direct income support.

International studies have shown income support policies have shifted households towards more profitable livestock production and improved recipients’ liquidity, repayment capacity, and production decisions.

In India, research indicates that the timing of PM-Kisan benefits is crucial for farmers’ investment decisions. Farmers who received PM-Kisan benefits during the peak agricultural season primarily invested the funds in agriculture, while those receiving funds during the off-season used them for consumption. The spending patterns of marginal farmers also differed significantly from those of small farmers.

To enhance the effectiveness of PM-Kisan, the government should restructure and release instalment amounts based on farmers’ seasonal needs.

Additionally, most States lag in maintaining comprehensive databases for land records, facing operational challenges in land record reconciliation, digitisation, and consolidation.

To address these challenges, the government should enrich the PM-Kisan scheme by including tenant farmers, urging States to maintain a dedicated portal for land records and encouraging States to contribute financially to the scheme. This comprehensive approach will ensure that the benefits reach all eligible farmers, promoting agricultural sustainability and farmer welfare.

The writer is Assistant Professor, NITTE School of Management, Bengaluru

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