New Government’s Outreach To Farmers
The first Cabinet meeting of the second NarendraModi government has rightly and significantly focused on the agricultural sector and welfare of the farmers. The Cabinet meeting has extended the mega scheme titled ‘Pradhan MantriKisanSammanYojana’ to provide an annual grant of Rs.6,000to 145 million Indian farmers.
There was another decision to provide Rs. 2000 income support each to over one crore farmers. The Union Ministry of Agriculture has stated that “to provide an assured income support to small and marginal farmers, the government is launching ‘Pradhan MantriSammanNidhi(PM-KISAN) Yojana”. This is an extension of the programme launched in Gorakhpur early this year just before the announcement of LokSabha polls 2019 with an annual outlay of Rs.75000 crores.
PM-KISAN is a financial inclusion programme, as the money will be deposited in the bank accounts of the farmers. This programme was initially announced in the Vote on Account Budget 2019-20 whereby 120million small and marginal farmers with agrarian land upto 2 hectares are eligible for Rs. 6000 per year, provided in three instalments. This Yojana (scheme) is designed to address agrarian crisis in our country.
The access of small and marginal farmers to formal banking system is still insignificant, so programmes like farm loan waivers are of little benefit to small and marginal farmers. The farm loan waivers also can adversely affect the public finances of state governments in India.
PM-KISAN would ease the agrarian distress caused by lower sales realisation of mega production of food grains, horticulture, oil seeds, cotton and sugar cane, to a great extent.
There is a shift in the policy dialogues recently from ‘guaranteed employment’ to ‘guaranteed income’. The ‘guaranteed income’ can provide dignity and empowerment to vulnerable sections of society, including small and marginal farmers, though it is not a long term solution to solve the ‘structural problems’ in the agrarian sector.
There is a need to enhance the gross capital formation in the agriculture sector to catalyse the growth of the sector. Estimates show that the agriculture sector has to grow at around 14-15 per cent to enable doubling of farmer’s income within five years. Revamping of irrigation system is very crucial as a significant chunk of agrarian land still depend on monsoon rains.
The government is expected to carry out careful analysis to understand whether there is any deviation from what the Cabinet meeting promised and the budgetary allocations to back up the programme. In a few countries, an institution titled ‘Fiscal Council’ carefully analyses these deviations between budgeted and actual spending on programmes.
This Fiscal Marksmanship analysis of whether any deviation between budgeted and actual spending is crucial to link ‘resources to results’ and to make PM-KISAN effective.
Economists also have concerns about the available fiscal space to carry out PM-KISAN. The budget to be presented by Finance Minister Mrs.NirmalaSitaraman is the immediate policy space where this programme would gain further clarity with adequate budgetary allocations. The agriculture sector is expected to be given emphasis in the ensuing budget.
The PM KisanSammanYojana is fully funded by the centre. Whether it would be re-designed in a “cooperative Federalism” model where Centre and States share the financial requirements and in what proportion remains to be seen in the coming days. However, it is a bold step to achieve human development concerns, which is beyond economic growth paradigm. Many states are also expected to roll out their version of farmers’ welfare schemes.
Economic growth per se cannot ensure human development, so deliberate public policies like PM-KISAN is required to address the livelihood concerns of India’s vulnerable farmers. This is a significant policy step of Prime Minister Modi’s “Leave No One Behind” (LNOB) paradigm which highlights ‘SabkaSaath, Sabka Vikas, SabkaVishwas’. This ensures dignity and empowerment to the vulnerable sections by removing their hardships for participating in the nation’s economic activity in the long run.
Script: Dr.Lekha S Chakraborty, Professor, NIPFP
There was another decision to provide Rs. 2000 income support each to over one crore farmers. The Union Ministry of Agriculture has stated that “to provide an assured income support to small and marginal farmers, the government is launching ‘Pradhan MantriSammanNidhi(PM-KISAN) Yojana”. This is an extension of the programme launched in Gorakhpur early this year just before the announcement of LokSabha polls 2019 with an annual outlay of Rs.75000 crores.
PM-KISAN is a financial inclusion programme, as the money will be deposited in the bank accounts of the farmers. This programme was initially announced in the Vote on Account Budget 2019-20 whereby 120million small and marginal farmers with agrarian land upto 2 hectares are eligible for Rs. 6000 per year, provided in three instalments. This Yojana (scheme) is designed to address agrarian crisis in our country.
The access of small and marginal farmers to formal banking system is still insignificant, so programmes like farm loan waivers are of little benefit to small and marginal farmers. The farm loan waivers also can adversely affect the public finances of state governments in India.
PM-KISAN would ease the agrarian distress caused by lower sales realisation of mega production of food grains, horticulture, oil seeds, cotton and sugar cane, to a great extent.
There is a shift in the policy dialogues recently from ‘guaranteed employment’ to ‘guaranteed income’. The ‘guaranteed income’ can provide dignity and empowerment to vulnerable sections of society, including small and marginal farmers, though it is not a long term solution to solve the ‘structural problems’ in the agrarian sector.
There is a need to enhance the gross capital formation in the agriculture sector to catalyse the growth of the sector. Estimates show that the agriculture sector has to grow at around 14-15 per cent to enable doubling of farmer’s income within five years. Revamping of irrigation system is very crucial as a significant chunk of agrarian land still depend on monsoon rains.
The government is expected to carry out careful analysis to understand whether there is any deviation from what the Cabinet meeting promised and the budgetary allocations to back up the programme. In a few countries, an institution titled ‘Fiscal Council’ carefully analyses these deviations between budgeted and actual spending on programmes.
This Fiscal Marksmanship analysis of whether any deviation between budgeted and actual spending is crucial to link ‘resources to results’ and to make PM-KISAN effective.
Economists also have concerns about the available fiscal space to carry out PM-KISAN. The budget to be presented by Finance Minister Mrs.NirmalaSitaraman is the immediate policy space where this programme would gain further clarity with adequate budgetary allocations. The agriculture sector is expected to be given emphasis in the ensuing budget.
The PM KisanSammanYojana is fully funded by the centre. Whether it would be re-designed in a “cooperative Federalism” model where Centre and States share the financial requirements and in what proportion remains to be seen in the coming days. However, it is a bold step to achieve human development concerns, which is beyond economic growth paradigm. Many states are also expected to roll out their version of farmers’ welfare schemes.
Economic growth per se cannot ensure human development, so deliberate public policies like PM-KISAN is required to address the livelihood concerns of India’s vulnerable farmers. This is a significant policy step of Prime Minister Modi’s “Leave No One Behind” (LNOB) paradigm which highlights ‘SabkaSaath, Sabka Vikas, SabkaVishwas’. This ensures dignity and empowerment to the vulnerable sections by removing their hardships for participating in the nation’s economic activity in the long run.
Script: Dr.Lekha S Chakraborty, Professor, NIPFP
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