Ahead of the next general elections scheduled for April–May 2024, the government is likely to raise the amount of money transferred under its flagship direct benefit transfer (DBT) scheme, PM-Kisan, to ₹7,500 per year from the current ₹6,000. The revised installment may be transferred before the Holi festival, starting from the December–March 2023–24 fiscal year after an announcement in the Budget.

“The government may increase the Budget allocation to ₹1,00,000 crore under PM-Kisan from the current ₹60,000 crore, even though the actual expenditure is likely to go up by a quarter,” an official source said. The actual expenditure was ₹66,825.11 crore in 2021–22.

Two options

There were two options before the government — the first was to keep the installment amount the same at ₹2,000 and raise the number of installments from 3 to 4 by increasing the total amount from ₹6,000/year to ₹8,000. The second option was to increase the installment amount from ₹2,000 to ₹2,500 and retain the total number of installments at three per year, sources said.

The government has been, for a long time, assessing the PM-Kisan scheme, and it found that there is a drop in the number of beneficiaries to about eight crore after exclusion criteria were implemented, whereas initially, the idea was to cover 11–12 crore farmers annually. So, whatever savings have been achieved with lower coverage will be passed on to the beneficiaries, the sources said.

The PM-Kisan scheme was launched in February 2019, before the announcement of the general elections, and the first disbursal was made for the December-March period of the 2018-19 fiscal. Releasing the 15th installment of PM-Kisan to 8.11 crore farmers across the country on November 15, Prime Minister Narendra Modi said the Centre has released over ₹2.75 lakh crore since the launch of the scheme. “Modi has a direct link with farmers without any intermediary,” he said, adding that farmers in agriculture and allied sectors are getting the benefit of the scheme.

“PM-Kisan allocation in 2023–24 is ₹8,000 crore lower than last year’s Budget Estimate. Though a number of farmers have been excluded due to not meeting the criteria, less than the required allocation for PM-Kisan is going to impact fiscal calculations. But buoyant tax revenues are expected to absorb this in the final fiscal deficit number,” said DK Pant, chief economist at India Ratings.

Investments in Infra

But some experts, wishing not to be named, said that the same amount of money, if spent on building infrastructure for a year, specifically on irrigation, will help farmers permanently earn many more times of the installment currently proposed to be paid.

“Though investment in infrastructure is a better option than direct income support, still raising the benefit under PM-Kisan, which is crop neutral, is better than declaring higher price support for any particular crop in a particular state. Declaring higher than MSP for a crop distorts the production basket,” said Ashok Gulati, a noted economist and former chairman of the Commission for Agricultural Costs and Prices. He said the proposed increase in the installment has taken care of inflation over the years since its launch.

There is a certain level of distress in the farming community as the kharif crop is not optimal, said Madan Sabnavis, chief economist of the Bank of Baroda. “Also, with elections coming up, such an allocation would seem timely, as the MNREGA and PM-Kisan schemes have been two support systems for farmers all through,” he added.