India budgets 2019:PM-KISAN to benefit 15 crore farmers

PM Narendra Modi's cabinet, in its first meeting of the new term, made big moves for farmers and traders. The cabinet has decided to extend the PM-KISAN scheme which promises poor farmers an annual payout of Rs. 6,000 in three instalments to all farmers.

Now, the new move will give benefits to around 15 crore farmers. Adding to it, the Cabinet has also cleared the pension scheme for traders. Three crore retail traders and shopkeepers will be benefited by this scheme. The revised scheme envisages an estimated expenditure of Rs. 87,217.50 crore in 2019-20. The previous government had estimated annual expenditure of Rs. 75,000 crore in the earlier version of the scheme.

It is to be noted that, the centre had announced the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme in the interim Budget 2019-20. Under this scheme, Rs. 6,000 amount were to be paid to 12 crore small and marginal farmers holding cultivable land of up to two hectares per year in three instalments, through Direct Bank Transfer.

The cabinet has also approved a new central sector scheme called the Pradhan Mantri Kisan Pension Yojana which is a voluntary and contributory pension scheme for small and marginal farmers across the country. "The central government will contribute to the pension fund in equal amount as contributed by the farmer," said Union Minister of Agriculture and Farmer Welfare, Narendra Singh Tomar.

He added, "The scheme provides income support to small and marginal landholder farmer families with cultivable land holding up to 2 hectare, across the country, by way of Rs. 6,000 per year. The ongoing scheme aims to cover around 12.5 crore SMF families. These decisions are expected to address the farm sector distress that has gripped the rural economy for some time now. One of the key contributors to the GDP growth, the agriculture and allied activities shrank in the financial year 2018-19."

According to the official data, the agriculture sector grew at only 2.9 per cent in FY-19 as against the growth rate of 5 per cent in the previous year.

Interestingly, just a month before the Union Budget, the decision to expand the PM KISAN scheme highlights government's priority accorded to the farm sector. As many policy experts have stated that higher spending in rural areas would boost economy and could be growth driver.