Sunday, February 2, 2020

Structural Tailbacks of Indian Agriculture and Exclusionary PM-KISAN Scheme: an Analysis


Santosh Verma
The NDA government brought a new scheme the Prime Minister Kisan Samman Nidhi (PM-KISAN) that became operational from 1st December 2018. It aimed to provide small and marginal farmers (SMFs) financial assistance to procure various inputs to ‘ensure proper crop health and appropriate yields’. It also aimed to protect these farmers from middlemen and moneylenders. SMFs were defined as the farmer families who collectively own cultivable land upto 2 hectares. According to the Agricultural Census (2015), the small and marginal holdings if taken together constituted around 13.78 crores (1378 lakhs) that is 86.08 percent of the total holdings in 2015-16.


What the PM-KISAN Scheme Is?
The PM-KISAN scheme is supposed to provide a payment of Rs. 6000 per year to SMFs in their Aadhar linked bank accounts in three equal instalments of Rs. 2000 each in every four months. For the households who were not having Aadhar linked bank accounts, they were supposed to provide alternate prescribed documents for identity verification to get the benefit of the first instalment under the scheme. But, for subsequent payment of instalments, Aadhar linked bank account was made compulsory.For the year 2018-19, the government of India allocated 20 thousand crores and for the year 2019-20, an allocation of 75 thousand croreswere made to run the PM-KISAN scheme.

Disbursal of Instalments under the Scheme
An initial identification of 874.45 lakh SMF households was made among the major states of India (see Table 1) for the first instalment of Rs. 2000 for each household for the period December 2018 to March 2019.From these identified SMFs households, only 821.90 lakh households were the final beneficiaries. The second instalment was made to 747.88 lakh SMF households which was further lesser than the first round of beneficiaries. The third instalment was made to further lesser SMF households (607.22 lakhs) which was a decline of 26.12 percent from the first round of beneficiary households across the major states of India.

All the states have witnessed a decline in SMF beneficiaries across India between first and third instalment. But, few states have witnessed a sharp decline in beneficiary households between subsequent rounds of instalments, for example, Arunanchal Pradesh (80.68 percent), Jharkhand (71.45), Manipur (59.71), Madhya Pradesh (54.12), Chhattisgarh (51.03), Meghalaya (48.96), Nagaland (45.48), Odisha (43.92), Bihar (38.22), Maharashtra (37.96) and Punjab (34.52).

Table 1: State-wise Identified SMF Households andBeneficiary Households (in lakhs) and Decline in Beneficiary Households (in %)
States
Identified SMF Households
I Instalment
II Instalment
III Instalment
% decline from I to III Instalment*
Dec. 18 to March 19
April- July 19
Aug.- Nov. 19
Andhra Pradesh
51.55
50.43
41.44
41.14
18.41
Arunanchal Pradesh
0.53
0.43
0.16
0.08
80.68
Assam
30.98
26.98
23.96
19.75
26.82
Bihar
53.77
50.84
46.93
31.41
38.22
Chhattisgarh
19.25
18.08
15.55
8.85
51.03
Goa
0.08
0.07
0.06
0.05
27.52
Gujarat
46.94
47.79
46.78
43.39
9.20
Haryana
15.02
14.44
14.13
13.35
7.57
Himachal Pradesh
8.64
8.56
8.41
7.65
10.66
Jammu & Kashmir
9.40
9.21
8.74
7.89
14.33
Jharkhand
15.14
14.44
7.44
4.12
71.45
Karnataka
49.45
47.37
46.52
35.52
25.02
Kerala
28.05
27.47
26.81
25.71
6.41
Madhya Pradesh
55.19
53.24
45.61
24.42
54.12
Maharashtra
87.39
80.36
67.12
49.86
37.96
Manipur
1.64
1.25
0.95
0.50
59.71
Meghalaya
0.68
0.67
0.62
0.34
48.96
Mizoram
0.69
0.67
0.64
0.53
21.84
Nagaland
1.67
1.61
1.57
0.88
45.48
Odisha
36.55
36.29
29.07
20.35
43.92
Punjab
22.32
22.30
22.15
14.61
34.52
Rajasthan
59.32
48.20
46.75
36.78
23.70
Sikkim
0.09
0.00
0.00
0.00
100.00
Tamil Nadu
35.48
34.67
33.62
31.29
9.75
Telangana
34.82
34.73
34.06
31.64
8.92
Tripura
1.94
1.93
1.89
1.82
5.84
Uttar Pradesh
200.90
183.15
170.31
149.29
18.49
Uttarakhand
6.99
6.72
6.57
6.00
10.68
West Bengal
0.00
0.00
0.00
0.00
0.00
Total
874.45
821.90
747.88
607.22
26.12
Source: Department of Agriculture, Cooperation and Farmers’ Welfare. * Author’s calculation.

States like Assam, Goa, Karnataka, Rajasthan, Mizoram, Uttar Pradesh, Jammu and Kashmir and Uttarakhand too have witnessed a major decline in beneficiary households (see Table 1). Meanwhile the political tussle between the BJP led Central Government and the Trinamool Congress led Government in West Bengal has led to neither identification of SMF households nor registration of these farmers for PM-KISAN scheme leading to zero monetary benefit to farmers in the state. Sikkim was another state where SMFs were neither identified nor registered for the scheme, so could not get any monetary benefit.

Reasons of Decline in Beneficiaries
The decline in subsequent instalments has been noticed due to the rigidity of the central government to pay to those SMFs only whose bank accounts are linked with the Aadhar data base. It has also been witnessed that the state governments,who are given responsibility to identify and enrol the SMFs on PM-KISAN portal, could not enrol them and due to the reason a large number of these SMFs could not get the money into their accounts.

As mentioned earlier, the scheme was launched by the NDA government barely few months before the General Election, it can be noticed from the Table 1 that the first instalment reached to almost 94 percent of the identified SMF households, but subsequently for later instalments, the number of beneficiary households declined sharply. It also portrays that in the post-election period, after getting the second term, the NDA government lost its earlier focus to implement the scheme. The way the beneficiaries have declined, the scheme may further be attributed as more an electoral gimmick rather to provide financial assistance to procure various inputs to ‘ensure proper crop health and appropriate yields’.

Structural Issues in Indian Agriculture and a DCT like PM-KISAN
As we all know, agriculture in India has been in crisis historically. Efforts for structural reform in Indian agriculture like land redistribution in the successive plans were half-hearted and largely unsuccessful due to lack of political will. Application of the Green Revolution technology on highly skewed land distribution patterns in India could have only regional and class effects leaving millions of SMFs without getting benefits of the strategy (Dhanagre 1987). In the neoliberal period, the rollback of the State in the form of reduction in subsidies to agriculture as a whole (on seeds, fertilizers, agricultural equipment, irrigation facility, energy, warehouses etc.) and reduction in rural development expenditure (Jha and Acharya 2011) have invited further deeper crisis in Indian agriculture. And opening of the domestic agricultural markets and reduction in export and import duties on agricultural products due to WTO obligations led to exposure of Indian farmers in the world market. All these led to first, rise in cost of cultivation, and second; volatility in input and output prices in agriculture where middlemen and traders, in a near absence of provisioning and procuring institutions, exploited the farming communities at their wish. All these longue duree structural bottlenecks in agriculture, one after another, aggravated the agrarian crisis in India.

Since the neoliberal policies were adopted, the cumulative effort of government of India is to implement mass income deflationary policies (in the form of reduction in support to agriculture and as well as reduction in rural development expenditure). These have dragged the farmers, peasants, landless agricultural workers into a situation of abandoning agriculture and to become rural or urban informal workers and many of them have forced themselves to take extreme steps like committing suicides. It further has created a psychological downslide before rural communities that if people adopt agriculture as principal occupation are actually ruining their lives.

The PM-KISAN scheme also doesn’t include the most vulnerable rural groups like agricultural laborers which is estimated around 41.2 percent of the rural households (Verma and Roy 2019) and households who have leased in land for livelihoods which account for around 15 percent of the total cultivators in India in 2012 (Bansal et al. 2018). In such a situation, without reforming the structural bottlenecks that have hampered agricultural activities and have dragged farmers into a deep crisis, one may ask how far this scheme will help out the farmers that too in situation where a significant number of SMFs are left out.

Questions are also raised on the practicability of direct cash transfer (DCT)schemes like PM-KISAN. The champions of DCT argue that digital transfers of money to the beneficiaries would reduce paper works, eliminate forged transactions, avoid red tape and will enhance efficiency. It is also argued that DCT will minimise the misdirection and leakages of the fund as the subsidy, directly, will go to intended beneficiary.But, earlier, in the non-DCT era, central government or state governments used to provide subsidies to manufacturers/dealers to provide seeds, fertilizers, equipment – tractors, pump sets, sprinklers, etc. on concessional rates and the farmers had to pay his/her share to the dealer and get the seeds, fertilizers and equipment. Though the system was not leakage free, but worked for the farmers. Now, farmers have to pay full price of whatever he/she wants to buy from manufacturers/dealers, so there is a chance of upward price spiral of these goods through creation of artificial scarcity – for example, we have seen it in the case of seeds and fertilizers. There is also fear that in the name of DCT, the government can reduce all other kinds of subsidies, support to agriculture and also further reduce in rural development expenditure. If it happens, it will further impact the farmers badly and aggravate the rural distress.

Concluding Remarks
In the long drawn structural backtails in agriculture, where around 42 percent rural households are landless, share cropping is significantly high and women’s largely have no land rights etc., any policy intervention has limited scope of success. The PM-KISAN scheme, which is supposed to transfer Rs. 6000 to SMFs bank accounts, within a year of its inauguration has become exclusionary in nature as the government has rigidly decided to transfer money to those beneficiaries only whose accounts are linked with Aadhar. In the process, there has been a decline of 26 percent beneficiary households across India between the first and third instalment. The government should understand that merely introducing technology will not necessarily make the system efficient or a policy successful that too in a country where land records are outdated and where access to banking services in the rural areas are still a distant dream.

The author is Assistant Professor at TISS, Hyderabad

Reference
Bansal, Vaishali, Yoshifumi Usami and Vikas Rawal (2018). Agricultural Tenancy in Contemporary India: An Analytical Report and A Compendium of Statistical Tables based on NSSO Surveys of Land and Livestock Holdings. Society for Social and Economic Research, New Delhi.
Dhanagre, D.N. (1987). Green Revolution and Social Inequalities in Rural India. Economic and Political Weekly, Vol XXII, No. 19, 20 and 21, Annual Number May 1987.

Jha, Praveen and Nilachala Acharya (2011). Expenditure on the Rural Economy in India’s Budgetssince the 1950s:An Assessment. Review of Agrarian Studies, Vol. 1, No.2, July-December.
Verma, Santosh and Ranjana Roy (2019). Political Economy of Inequality in Ownership Holdings in India: An Analysis of 70th Round NSS Data. Man and Development, Vol. XLI No. 3, 1-20, September.

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