PM-KISAN is not reaching all farmer households as intended

03 Aug 2020

Given this uncertainty over the reach of PM-KISAN and its targeting the relevance of the scheme needs to be carefully evaluated during this period.

Opinion: Dr Bornali Bhandari Dr Santanu Pramanik & Dr Sonalde Desai 

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is the first universal basic income-type of scheme targeted towards landed farmers. It was introduced in December 2018 to manage agricultural stress. Initially the scheme was targeted at small and medium landed farmers but with the declining growth in gross value added of the agricultural sector it was extended to all farmers in May 2019. The Union budget had allocated Rs 75000 crore to this scheme in 2020-21.

PM-KISAN is a useful vehicle to provide support to farmers during the lockdown and it was included in the Pradhan Mantri Garib Kalyan Package and on March 28 it was announced Rs 2000 (out of Rs 6000) would be front-loaded to 8.7 crore farmers between April-June. But was this a useful way of relieving distress during the lockdown? Data from the Delhi-NCR Coronavirus Telephone Survey Round 3 (DCVTS-3) conducted by the NCAER National Data Innovation Centre in mid-June provides some useful insights. 

The target geographical area for DCVTS is the Delhi-NCR. The DCVTS-3 included 52 per cent rural and 48 per cent urban households from Haryana Delhi Rajasthan and Uttar Pradesh. The survey offers a holistic perspective to understand the extent of income loss of farm households their experience of hardship and the role of PM-KISAN in alleviating their suffering during April-June. Out of the 3466 households in the sample 18 per cent reported cultivation as the primary source of household income. 

The survey records a somewhat lower level of economic distress among farmers than among other groups. While farmers faced some logistical challenges in transporting and selling their produce 97 per cent of them continued to harvest rabi crops and prepared for the kharif season. Nearly 75 per cent of the cultivators who usually hire labourers for agricultural activities continued to do so. 

As a result farmers were relatively immune to the economic impact of the lockdown. About 32 per cent of them experienced large income losses in the month of May which is much lower compared to the proportion among casual wage workers (73 per cent) and business households (70 per cent). About 20 per cent of farm households reported no reduction in their income in May. 

The proportion of households that had to borrow to meet their day-to-day consumption needs during the lockdown was relatively low for the farmers (34 per cent) compared to casual wage workers and business households. While 7 per cent of farm households suffered from occasional unavailability of food during the lockdown this figure was much higher for casual workers (24 per cent) and business households (14 per cent). 

In the months of April and May 21 per cent of 632 farm households received cash transfers through PM-KISAN. Among the recipients around two-thirds reported receiving Rs 2000 and about a fourth received Rs 4000 in April and May combined possibly because family members engaged in agricultural activities may be co-residing within a household.

On the whole when compared to non-recipients of PM-KISAN (including both farm and non-farm households) these households exhibited lower signs of economic distress. About 35 per cent of rural PM-KISAN recipients suffered income losses to a large extent in comparison to more than half of the non-recipients. A little more than a third of PM-KISAN recipients borrowed money during this period as against 48 per cent of non-recipients. However these households were somewhat better off than the general rural population even before receiving PM-KISAN benefits. Thus their relative immunity to the income shock may not be solely due to PM-KISAN. 

Two aspects of this scheme present particular challenges. First PM-KISAN is not reaching all farmer households as intended. Most of the farmers in UP Haryana and Rajasthan own land and should be receiving benefits. But only 21 per cent of the cultivators interviewed reported receiving the benefit. The exclusion is greater in UP than in Haryana and Rajasthan. Second this scheme is not pro-poor since recipients of PM-KISAN seemed to be better off than the general rural population even before the lockdown. Given this uncertainty over the reach of PM-KISAN and its targeting the relevance of the scheme needs to be carefully evaluated during this period

Bhandari and Pramanik are senior fellows at NCAER Desai is a joint professor at NCAER and University of Maryland. Views are personal