During the last five years or so, the central government and several state governments ruled by different political parties have liberally resorted to schemes such as loan waivers and minimum support prices (MSP) of agricultural produce, along with price deficiency schemes like the Bhavantar Bhugtan Yojana of Madhya Pradesh or crop insurance schemes like the Pradhan Mantri Fasal Bima Yojana (PMFBY) and eNAM (National Agriculture Market), among others, to meet the challenge of non-remunerative market prices to farmers for their agricultural produce—for reasons including losses due to climate change and vagaries of nature. However, none of the above schemes have given the desired results, and small/marginal farmers and landless agricultural labourers haven’t really benefited.
Of late, due to the unsatisfactory performance of the above schemes, minimum income guarantee programmes in different formats have been or are being launched, with the hope that these would mitigate poor farmers’ distress. Cash-rich states of Telangana and Odisha are cases in point; Telangana introduced the Rythu Bandhu scheme and Odisha introduced KALIA (Krushak Assistance for Livelihood and Income Augmentation). The Centre is also trying its hand at a central scheme for all states and launched, on February 24, the direct income transfer scheme called the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN)—for small and marginal farmers owning up to two hectares of land. It’s made effective from December 1, 2018, and Rs 6,000 will be deposited in bank accounts of eligible beneficiaries (about 12 crore) per year in three equal instalments, and the first instalment of Rs 2,000 was already distributed to about 1 crore farmers at the time of launch.
The question is: Whether PM-KISAN will be able to deliver and achieve the ultimate objective of the BJP government of doubling farmers’ income as envisaged in the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA), or will it meet the same fate as earlier schemes insofar as the poor kisan is concerned and may only help the ruling party gain in the general elections? Before answering, it is relevant to know about the Universal Basic Income (UBI) from which, it appears, the idea of PM-KISAN has been drawn.
UBI has six salient features and is a cash-transfer scheme on a monthly basis to every individual in a family for lifetime. It evolved in early 20th century, but implemented in a sporadic manner on experimental basis for limited periods, not permanently, by some western countries such as the US, England and Finland and some others, and was never implemented in its full meaning anywhere in the world. It appears this welfare model is being abandoned in many countries, not only for its large budgetary implications, which is true, but also for reasons like making people lethargic (having no urge for work and destroying work culture in a nation). This, in turn, would reduce employment and have a negative impact on a country’s economy, as some studies in the US and the UK have shown. In developing countries like India, such huge requirements of funds for running such a scheme can’t be managed without cutting expenditure on other important development projects. Some proponents of UBI in India quote SEWA-UNICEF (Self Employed Women’s Association-UNICEF) pilot project, conducted in Madhya Pradesh between 2011 and 2013 in eight normal villages and one tribal village, as an example of success of UBI-based monthly income transfer welfare model. If so, why was this model not replicated in the entire state that had the BJP in power from 2013 to 2018, and the Centre too had a BJP-led government? Has any research been done on this?
Coming back to PM-KISAN, we first need to understand the limitations and challenges in its implementation:
* Being a cash-transfer scheme, it exudes little confidence in its success like the National Food Security Act and other subsidised schemes for providing seed, fertiliser, water and electricity, etc, which are in the form of in-kind transfer to the farmer. It’s because of the obvious reasons of financial leakages in its implementation, as our experience with the ongoing flagship cash scheme MGNREGA proves. In addition, the banking system may not work satisfactorily in far-flung areas of the country.
* Land records in many states are not fully digitised and updated, and it would create issues of both wrong inclusion and exclusion in the identification of beneficiaries. Thus, many deserving persons could be deprived of the benefits.
* The assistance of Rs 6,000 is too meagre considering high cost of cultivation and, therefore, would not stop poor farmers to run to private moneylenders, which is worrisome and needs to be avoided. Do we know that small/marginal farmers who constitute about 86% of landowning farmers consume whatever they grow and have very little surplus to sell?
* There is also a possibility of misuse of monetary assistance by the beneficiaries, which would forfeit the very purpose of the scheme.
* There is a lacuna in the design itself of PM-KISAN, as it does not cover tenants, agricultural labourers and sharecroppers, who constitute about 30% of poor farmers (one must learn from KALIA of Odisha in this respect).
n Lastly, but most importantly, the Centre has estimated yearly expenditure of Rs 75,000 crore on PM-KISAN, which would greatly increase if the government includes landless labourers and enhances the amount of Rs 6,000—both of which are necessary requirements. This would be in addition to about Rs 2.5 lakh crore of subsidy that is already provided for various farming inputs and the expenditure on MGNREGA. Is such a huge amount possible within the government’s fiscal space that, anyway, is tight?
In view of the above facts, my research says that even PM-KISAN would not achieve what the government intends to do. It’s like giving a farmer a fish, rather than teaching him how to fish, as the Chinese proverb goes. The need of the hour is that the government should develop capabilities in poor farmers (in fact, in all the poor) by imparting them suitable education and training, and providing good health and sanitary conditions. It is only a healthy mind in a healthy body that can achieve something on its own, fighting through the market forces. The government has to focus more on these aspects as the existing efforts in this direction, both in terms of expenditure on infrastructure and manpower, are insufficient. Such an expenditure would be an investment that will come back into the economy and won’t go down the drain. We have already wasted seven precious decades.