Chief Economic Adviser (CEA), K V Subramanian said the farm income support scheme, Pradhan Mantri Kisan Samman Nidhi Yojana (PM-KISAN) will provide multiple benefits to the farmers, which will include improving their credit value.
Government had announced the PM-KISAN in the Interim Budget 2019-20 presented on 1st February, under which Rs. 6 000 will be given to around 12 crore farmers with cultivable land up to 2 hectare in three instalments.
He told media that the producer support in the country is very low as compared to other nations and the PM-KISAN yojana will help in supplementing that.
Mr. Subramanian said, “Across the nations, the producer support for farmer’s are very high. The recent OECD study mentioned that the producers support in India is quite low. And this segment is the one which feeds 125 crore people and we have a population that is increasing at less than 1 % while food production is growing at greater than 3 %,” he said.
Thus, there will be surpluses leading to drop in prices impacting income of growers, Subramanian said.
He said the reason farming is supported in so many countries is that the risk-return exchange is bad in the sector. “As a result, this constituent required support. There is certainly a case for supporting in a way that does not create distortion,” he told.
He also said the other important advantage of this yojana is in terms of making farmers of the country credit worthy as financial institutions have assured cash flow for this vulnerable section.
The advisor added that average income of farmers in the year 2015-16 was around Rs. 30000 and hence Rs 6000 would be 20 %.
Mr. Subramanian said, “If you have certain cash flow, the banker can collateralize it and give to the farmer up to Rs. 24,000 every year. Three -four times of a Rs. 6000 guaranteed income can be given to cultivators by using the microfinance. But what is significant is that this is an assured return, which has not been done until now. And this is something the financial institutions can certainly use”.
The scheme will have multiple benefits as it commences from basic premise that you need to be supporting an essential constituent of the economy which is susceptible, he said, adding that it is something which is imperative.
Honorable Prime Minister, Shri Narendra Modi will launch the scheme formally at a farmers’ rally in Gorakhpur (Uttar Pradesh) on 24th February. Moreover, the data uploaded on the PM-KISAN website till 24th February will be considered for transfer of 1st instalment at the opening event and the 2nd instalment will be released from 1st April.
