Mains Paper 3: Economy
Prelims level: PM-KISAN
Mains level: Multiplier effect of the PM-KISAN scheme
Pradhan Mantri Kisan Samman Nidhi, popularly known as PM-KISAN,
announced in December 2018 was a tectonic shift in the nature of government
support to farmers in India.
This scheme was aimed at addressing the liquidity constraints of
farmers for meeting their expenses for acquisition of agricultural inputs
About the scheme:
This scheme is particularly important in a country like India, where
still about half of the farming households do not have access to formal
The scheme implemented from February 2019 provides each eligible
farmer’s family ₹6,000 per annum in three instalments of ₹2,000 each.
Initially, farmers with less than two hectares of land were eligible;
subsequently, the benefit was extended to all farmers (about 140 million
farmers) from June 2019 onwards. The amount is transferred directly to the
beneficiary’s bank account to check leakages.
Different from existing schemes:
By its design, PM-KISAN is positioned as an income support to the
farmers. The launching of this scheme generated a serious discussion in the
policy discourse in India.
The timing of the announcement made this scheme appear as a
politically motivated move to appease the farming community on the eve of
However, this is a clear departure from the existing systems of
support to the farmers and the scope of PM-KISAN goes much beyond,
especially in the case of resource-constrained farmers with significant
The effects in principle could be related to the choice of
technologies and practices that could have significant effects on farmer’s
income and welfare.
The scheme has now completed almost a year and the third instalment
was transferred recently by Prime Minister Narendra Modi.
But a proper understanding of the implications of this ambitious
farmer income support programme is virtually non-existent.
The International Food Policy Research Institute (IFPRI) in
association with the Indian Council of Agriculture Research (ICAR) embarked
on a study to empirically assess technology choices and adoption of
practices following the rollout of PM-KISAN.
Since the study focussed on technology choices for the beneficiary
farmers, it realised that adoption of technology for resolving liquidity
issues is just one cog in the wheel. Knowledge and extension support is also
needed to bring about adoption.
Taking the primary objective of fostering timely usage of inputs, that
is, technology, the study, based on primary survey, evaluated the
implementation of PM-KISAN and the role of Krishi Vigyan Kendras with
strategic complementarity for magnifying its impact. The study focussed on
Uttar Pradesh, which is home to 24 million farmers.
Our study reveals that 30 per cent farmers received the income benefit
within three months of the scheme’s implementation. Banking infrastructure
created through Pradhan Mantri Jan Dhan Yojana (PMJDY) played a key role in
the fund disbursal.
Programmes like this are often subject to elite capture and selection
biases. But our findings depicted no selection bias in terms of social,
economic, and farming characteristics.
Further, 93 per cent non-beneficiary farmers had already applied for
the scheme, depicting awareness and potential uptake. When augmented with
extension through KVKs, the adoption of modern inputs is significantly
higher (to the tune of 36 per cent).
The first instalment was received by the farmers in February 2019,
which may be characterised as the agriculture peak season (in terms of
spending requirements), while the second instalment was received by the end
of April 2019, characterised as the agriculture off-season.
Results show that of those who received the first instalment, 52 per
cent spent it on agriculture, 26 per cent on consumption, 7 per cent on
education and health, and the remaining 15 per cent on other incidental
expenses (such as during festivals and on social functions like marriage).
Among the recipients of the second instalment, 39 per cent spent it on
consumption, followed by agriculture (23 per cent) and education and medical
(19 per cent).
Therefore, PM-KISAN along with agricultural advisory services has the
potential to break the cycle of intergenerational poverty and low income of
farmers through investment in modern technology.
A direct transfer scheme like PM-KISAN is a game-changer and can have
significant effects if it is timely, not transaction cost heavy and is
provided with complementary inputs such as extension services.
Q.1) With reference to the mandamus, consider the following statements: 1. It orders the person or body to perform a public or quasi-public duty,
which they have refused to perform, and where no other adequate legal remedy
exists to enforce the performance of that duty.
2. Under Article 361, mandamus cannot be granted against the President or
Governor of a State, “for the exercise and performance of the powers and duties
of his office or for any act done or purporting to be done by him in the
exercise and performance of those powers and duties”.
Which of the statements given above is/are correct? (a) 1 only
(b) 2 only
Q.1) What are the multiplier effects of the PM-KISAN scheme? =