New Delhi PM Kisan, the Union government’s cash-transfer scheme for farmers, has completed six years and 19 instalments so far, as Prime Minister Narendra Modi released on Monday the latest tranche in Bihar’s Bhagalpur.
The government’s data show nearly 100 million farmers have received over ₹3.5 lakh crore since the scheme’s launch.
“Today I have the privilege of releasing the 19th instalment of PM-KISAN. I am very satisfied that this scheme is proving to be very useful for our small farmers across the country,” PM Modi said, while releasing the latest tranche.
Cash-transfers have been a popular mode of income support in many developing nations, especially Latin America, and favoured by economists because of their efficiency. They eliminate middlemen and therefore minimise the scope for corruption.
In Ethiopia, for instance, cash transfers under the productive safety net program were spent primarily on food, but also seeds and fertilisers, setting off a “virtuous cycle of productive investment”, according to a study.
In India, the so-called direct-benefits-transfer model ensures cash is deposited straight into beneficiaries’ accounts through electronic transfer.
In the latest payout, over 97 million farmers received direct financial benefits amounting to more than ₹21,500 crore, Modi said.
Under PM-KISAN, the government provides income support of ₹6,000 a year to farmers with a valid enrolment, paid in three equal cash transfers of ₹2,000—one every four months. It was launched on 24 February, 2019, when the first instalment was paid.
Identification of beneficiaries under the programme is the responsibility of state governments as per the scheme’s guidelines.
Any land-owning farming household can enrol itself subject to exclusions that involve income ceilings, income-tax payments and government employment. Elected representatives and anybody with a monthly pension of ₹10000 or more are also ineligible.
India’s agricultural system feeds the country’s 1.4 billion people as well as provides for exports by producing a variety of cereals , horticulture produce, oilseeds and lentils.
Total foodgrain production stood at 332 million tonnes in 2023-24. However, more than 90% of the country’s cultivators are smallholders who can’t afford to make adequate investments.
For such farmers, cash benefits of ₹6000 a year provides income support to buy inputs, such as seeds, and has cut reliance on private credit to meet costs, analysts say.
Research has shown that PM Kisan has served the poorest farmers well but since the payouts are not linked to inflation, price rise is bound to undercut its gains in the long run.
Administrative hurdles and proper indexation of land records — which are in the domain of states — need to be finetuned, according to experts.
In a Sept 2024 study published in the Journal of the Experimental Agriculture International, agronomist Bhaskar Gosh and his team from the Indian Agricultural Research Institute found the scheme enhanced income of small farmers but it “encounters several implementation challenges that diminish its effectiveness”.
Data were collected from 120 small and marginal farmers and 30 state department officials using surveys and interviews in eight gram panchayats in Bihar and Uttar Pradesh.
“Major issues identified include discrepancies in land area records, a complex grievance resolution process, delays in fund disbursement, and inaccuracies in beneficiary data,” the study states.
In December 2024, the government told Lok Sabha that states had recovered a total of ₹335 crore of PM-Kisan payouts from either non-farmers or ineligible farmers after largescale vetting of data of beneficiaries.
In Ghosh’s peer-reviewed study, the most “significant issue” identified by beneficiaries was discrepancy in land-area records mentioned in the land deeds since accurate land records are crucial for PM Kisan payouts.
“Errors or discrepancies in land records can lead to incorrect fund disbursement or even exclusion of eligible beneficiaries…causing considerable distress among farmers,” the study states.
The other issue flagged by beneficiaries is the complex and time-consuming process of grievance redressal.
The Centre uses a “public financial management software” to transfer funds after triangulation of land records, the biometric ID Aadhaar and verified bank accounts to ensure error-free transfers, said an agriculture ministry official who is part of the PM-Kisan team.
The scheme initially started on a trust-based system, where beneficiaries were registered by the states on self-certification basis.
“Cash transfers should be used alongside public provisioning of essential goods and services. Funding for PM Kisan comes from Centre but it is fully implemented by states, which calls for constant coordination at multiple levels,” said R Mani, retired economist at Tamil Nadu Agricultural University.