Model Answer
0 min readIntroduction
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, launched on February 24, 2019, is a direct benefit transfer (DBT) scheme under which eligible small and marginal farmer families are provided financial assistance of ₹6,000 per annum. This is disbursed in three equal installments of ₹2,000 each, directly into their bank accounts. The scheme aims to supplement the income of farmers, enabling them to invest in agricultural inputs and improve their livelihoods. However, the scheme’s implementation and impact have been subject to debate, with implications spanning economic, agricultural, and governance spheres.
Economic Implications
The PM-KISAN scheme has several economic implications:
- Increased Rural Demand: The direct transfer of funds boosts aggregate demand in rural areas, stimulating local economies and consumption. According to a 2021 study by the National Council of Applied Economic Research (NCAER), the scheme led to a 5-10% increase in rural consumption expenditure.
- Fiscal Burden: The scheme places a significant burden on the exchequer. The annual financial outlay is substantial, requiring careful fiscal management. In FY23-24, the budgetary allocation was approximately ₹60,000 crore.
- Impact on Inflation: Increased disposable income in rural areas can contribute to inflationary pressures, particularly for essential commodities.
- Multiplier Effect: The money received by farmers is likely to have a multiplier effect, boosting economic activity in related sectors like agricultural inputs, transportation, and retail.
Agricultural Impacts
The scheme’s impact on agriculture is multifaceted:
- Investment in Inputs: The financial assistance enables farmers to invest in essential agricultural inputs like seeds, fertilizers, and pesticides, potentially increasing productivity.
- Reduced Distress: The scheme provides a safety net for farmers facing economic hardship, reducing instances of farmer distress and indebtedness.
- Crop Diversification: While not directly incentivizing it, the additional income can empower farmers to explore crop diversification, reducing reliance on monoculture.
- Limited Impact on Land Productivity: Critics argue that the amount provided is insufficient to significantly improve land productivity, especially for small landholdings.
Governance Challenges
The implementation of PM-KISAN has faced several governance challenges:
- Identification of Beneficiaries: Ensuring accurate identification of eligible beneficiaries remains a challenge, with instances of ineligible individuals receiving benefits and eligible farmers being excluded.
- Data Integrity: Maintaining data integrity and preventing duplication of beneficiaries is crucial. Issues related to land records and Aadhar seeding have posed challenges.
- Leakage and Corruption: The possibility of leakage and corruption in the disbursement of funds exists, requiring robust monitoring and accountability mechanisms.
- State Government Cooperation: Effective implementation requires close coordination between the central and state governments. Variations in land records and administrative capacity across states can hinder progress.
| Aspect | Positive Implications | Negative Implications/Challenges |
|---|---|---|
| Economic | Increased rural demand, multiplier effect | Fiscal burden, potential inflation |
| Agricultural | Investment in inputs, reduced distress | Limited impact on land productivity |
| Governance | Direct benefit transfer, reduced intermediaries | Beneficiary identification, data integrity, leakage |
Conclusion
The PM-KISAN scheme represents a significant step towards providing income support to small and marginal farmers. While it has demonstrably boosted rural demand and provided a safety net, its long-term impact on agricultural productivity and sustainability remains to be seen. Addressing governance challenges related to beneficiary identification, data integrity, and leakage is crucial for maximizing the scheme’s effectiveness. Future iterations should consider linking benefits to sustainable agricultural practices and promoting crop diversification to ensure a more holistic and impactful intervention.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.