Kisan Samman Nidhi— Outlays and Outcomes

The interim budget of 2019 has a variety of schemes and policies that aim to benefit the masses. Developed in the context of a severe agrarian crisis, the interim budget was preceded by several protests and marches by farmers with demands to address their state of turmoil. With elections around the corner, several states began to announce waiver packages of various intensities. The Kisan Samman Nidhi is the culmination of all these policies. It is a direct cash transfer programme that would benefit the marginal farmers in the nation.

To begin with, the scheme is a direct cash transfer scheme, meaning that a promised amount would be directly transferred to the bank accounts of farmers. The scheme has assured a sum of ₹6000 per annum to the marginal farmers who hold less than two hectares of land. The amount would be transferred to them in three instalments of ₹2000 each. The scheme has been brought to effect as of 1 December 2018, meaning that the first instalment would be given to the farmers on the 31st of March, prior to the general elections. This scheme is set to benefit 12 crore farmers in India and has been allocated ₹20,000 crore for the present fiscal year and ₹75,000 crore for the coming fiscal year.

This scheme has been promoted as one of the flagship interventions for the benefit of the farmers who have been affected by the agrarian crisis. However, there are several criticisms levelled against the scheme. To begin the analysis, let us consider the scheme as it is without looking into the political undertones surrounding it. The major hurdle that arises is the implementation. In India, how are we to identify land ownership when there is no single database on land ownership. There are multiple documents of ownership for one single piece of land. In many cases, the ownership or transfer of ownership has not been documented, especially when the land has been split between the sons. In such cases, how are we to identify the beneficiaries and ensure that every eligible farmer receives it. Another problem is about verifying whether every applicant is eligible. There are the problems of omission and wrongful inclusion. If this scheme is to be implemented and the first instalment be made on the 31st of March, there is no time to develop a verified and inclusive database. This would mean that inefficiencies are bound to set in.

When we look at the amount of money that the farmers are being given, it is very minimal as the farmer gets only ₹500 a month which may not sufficiently act as income support. Comparing to a similar scheme in Telangana, farmer leaders have quoted that ₹6,000 given by Kisan Samman Nidhi is very frugal when compared to the ₹10,000 per acre given by the Ryathu Bandhu Scheme. This consequently raises the question regarding the intentions of the policy. Is this policy going to supplement the existing schemes or is it going to substitute them? The timing of the policy and the first instalment is also rather problematic as it can be an attempt by the incumbent government to attract farmers’ vote in the upcoming general elections. This scheme does seem to have political motives behind it and many farmer leaders have criticised it as a failed attempt to buy the votes of the farmers.

Yet another pertinent issue is with regard to the landless labourers and other farmers, such as the tenant farmers, who do not fit in this category. They form a substantial portion of the farming community and they are left out of the entire scheme. A final question that arises is as to how long the government intends to provide this support. When we look at the cost outlay per year, the scheme would require ₹7,50,000 crores in the coming decade which is a substantial amount given the extent of the fiscal deficit that India is facing. It is not unacceptable for the governments to borrow but it should ensure that the borrowings do not go into making routine expenditures. So rather than just transferring the money to the farmers, this amount could be invested in building the infrastructure that is necessary to improve the conditions of the farmers.

The scheme lacks clarity in terms of its purpose and how it would be implemented. Policies such as this may seem to avert the problem temporarily but do not generate income in any way. The amount is too little for the individual farmer to even invest in land development or development of irrigation. With the mounting crisis in the agrarian sector, interventions need to focus on enabling the farmer to deal with the adversities of the market and vagaries of nature. Building connectivity to markets, construction of storage facilities and cold chains, removing of middlemen, building irrigation infrastructure, providing cheap credit and incentivising repayment of loans are ways in which the amount can be put to better use rather than directly putting the money into the pockets of the farmers.

Picture Courtesy- IndiaFilings


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