Pradhan Mantri Kisan Samman Nidhi is a scheme announced during the interim budget, to which susceptible landholding farmer families, having cultivable land up to 2 hectares, is going to be furnished with direct income support of Rs. 6000 each year. The notion of Universal Basic Income has been in discussion for some time among academics. But with many state governments announcing cash transfer schemes, and now the Central government, the idea has moved from academic discussion to the political arena.
Benefits of Cash transfers:
Disposable income in the hands of farmers who can spend at his/her will.
Formalization of the economy- Increase banking penetration, reduce borrowing from informal money lenders.
Provides protection against fluctuation in agricultural produce and consequent price discovery due to vagaries in climate
Alleviate social economic inequality.Although the governments are toying with the perception of cash transfers, these are not full proof because of the following reasons:
Reduces fiscal space for the government: less amount to invest in agricultural infrastructure and crowds out investment for other companies.
Robinhood approach- state providing only cash and absolving itself of providing services such as health, education, nutrition and livelihood.
False understanding of financial inclusion on account of:
Inadequate banking penetration
Financial & digital illiteracy.
6000 annually is definitely a meagre amount to sustain a livelihood. In addition, money can also be used for immoral purposes.
Identification of beneficiaries difficult - not enough scientific record maintenance and up-gradation.
Undoubtedly this is Great Program by Government of India. People of India are absolutely sure that PM Kisan Samman Nidhi
will uplift the Status of Indian Farmers.The way forward: Necessity of the hour is to -
Improve infrastructure in agriculture which will help farmers in obtaining a competitive price for their produce and access to markets.
Provide free and universal having access to public services and access to livelihood opportunities.
Digital and financial literacy campaign so as to lower their scepticism towards formal banking.
Strict adherence to RBI guidelines of opening 25% of smaller than average payment banks in rural areas.The very best antidote to farmers' stress is not doling out cash but enabling infrastructure, investment and mechanisation in agriculture so as to reach the target of doubling farmer's income by 2020.