Written by R S Deshpande
The farm economy has distinct features compared to usual household economic behaviour. About two decades back, when I was working in the farm sector, I observed the dire need for cash for the procurement of agriculture inputs and allied activities every year. Most farmers were short of liquidity and faced issues in the timely purchase of the required resources. Crop loans are available but if an earlier loan is due, it is difficult for the farmer to get a new loan. This forces him/her to take loans from non-institutional sources. The feeling of going and asking someone for petty cash for the purpose of pre-sowing operations causes mental distress and hardship. It is exactly at this place that the interlocking of the credit market with the product of the labour market takes place and the poor farmer is at the receiving end.
This is the time when the farmers need financial support. Keeping in view the cropping calendar, the cash requirements mainly come at the time of inter-cultivation and at the time of harvest. The crop loan system of the Kisan Credit Card (KCC) certainly provides some help to the farmer. It was observed that the farmers prefer to withdraw the eligible credit available on the KCC at one stroke rather than visiting the bank more often. Therefore, the most important aspect of farm household economics is the requirement of cash at different points of time in a crop year. In addition to pre-sowing, growth and inter-cultivation, and the harvest season, the farmer also requires cash for domestic needs.
The PM-Kisan Samman Nidhi Yojana (PM Kisan) scheme was launched on February 24, 2019, in Gorakhpur, UP by Prime Minister Narendra Modi. Under this scheme, Rs 6,000 per year is transferred to the bank accounts of farmers’ families across the country — subject to certain exclusion criteria relating to higher income status – through the Direct Benefit Transfer (DBT) mode. The amount is transferred in three equal installments of Rs 2,000 every four months, every financial year. The scheme provides income support to landholding farmers in India, which helps them procure various inputs related to agriculture and allied activities and their domestic needs. The government is trying to reach and pass on the benefits to all eligible farmer families through this scheme. This is one of the finest examples of good governance.
PM Kisan has successfully provided assistance of more than Rs 2 lakh crore. This makes it the largest DBT scheme in the country. More than Rs 1.6 lakh crore has been transferred to eligible farmers since the lockdown started in March 2020, which is more than 80 per cent of the total disbursement.
The process of registration of beneficiaries has been made simple and easy through a mobile app — PM KISAN portal — and walk-ins are facilitated via Common Service Centres in order to give the maximum benefit to the farmers. The scheme provides for grievance redressal and a helpdesk. Through this initiative, more than 13.5 lakh grievances have been addressed by the concerned state authorities. Significant efforts have been made by the government in enabling the PM Kisan scheme, which has revolutionised the welfare for farmers in India.
The impact of the scheme is well-received in rural areas. It has a significant impact on easing liquidity constraints as a large share of farmers have constraints on obtaining formal credit. While the scheme is pitched as a general cash transfer scheme for farmers, its role in the adoption of modern technologies remains an important contributing factor in the modernisation of agriculture by enhancing productive investment by farmers.
The writer is former director, Institute for Social and Economic Change
