Economy

Finance Ministry wants 2 ‘PM Kisan’ instalments paid by month-end

Shishir Sinha New Delhi | Updated on September 17, 2019 Published on September 17, 2019

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The Finance Ministry has asked the Agriculture Ministry to complete the payout of two instalments of ₹4,000 to farmers under the PM Kisan scheme by September 30. This is to boost rural demand in the coming festival season.

PM Kisan or Pradhan Mantri Kisan Samman Nidhi is an income support scheme. It provides ₹6,000 in three equal instalments annually. Initially, the coverage was limited to small and marginal farmers (roughly 86 per cent or 12.5 crore farmers with cultivable landholding up to 2 hectares).

However, government, in its first Cabinet decision during second term, decided to expand the coverage to all farmers, which means around 14.5 crore farmers will get the benefit. The government has allocated ₹87,217.50 crore for the current year. It became operational on December 1 last year.

 

‘Work in progress’

“Work is in progress to ensure the payout,” a government official said. Though the total amount is to be disbursed in three-four monthly instalments, it seems that the government wants to release the first two instalments in six months as against eight months with the onset of the festival season. The season will kick off on September 29, first day of Navratri.

In order to help the farmers, especially in flood-affected regions, the Finance Ministry is also trying to ensure quicker payout under Pradhan Mantri Fasal Bima Yojana, PMFBY or the crop insurance scheme. “Teams of Finance Ministry, Agriculture Ministry and insurance companies are working together to see that compensations are paid quickly. We have also asked insurance companies to ease the assessment process, if water is still there (in the field),” the official, quoted above, said.

So far, such mechanism has been used to pay for crop damage in States such as Maharashtra, Karnataka and Gujarat etc. When asked about Madhya Pradesh, the official said the situation had deteriorated in recent days, so the process will be initiated in sometime there.

PMFBY is an actuarial premium-based scheme under which farmer has to pay maximum premium of 2 per cent for kharif, 1.5 per cent for rabi food and oilseed crops and 5 per cent for annual commercial/horticultural crops and remaining part of the actuarial/bidded premium is shared equally by the Centre and State governments.

To resolve the issue of delay in payment of claims, timelines have been tightened and penalty provision of 12 per cent interest rate per annum by the insurance company to farmers for delay in settlement of claims beyond 10 days of prescribed cut-off date for payment of claims; 12 per cent interest rate for delay in release of State share of Subsidy beyond three months of prescribed cut-off date/submission of requisition by Insurance Companies etc. have been prescribed in the revised operational guidelines issued recently.

Published on September 17, 2019
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