Understanding the Programme
At the heart of this decision is the Pradhan Mantri Kisan Samman Nidhi, commonly known as PM-KISAN. Launched in 2019, the scheme is a cornerstone of the government's agricultural support policy. It provides eligible landholding farmer families with financial
assistance of ₹6,000 per year. This isn't a loan or a subsidy for supplies; it's a direct cash transfer, delivered in three equal instalments straight to their bank accounts using the Direct Benefit Transfer (DBT) system. The scheme's scale is immense, with the latest instalment reaching over 9.49 crore farmers. Its goal is to supplement farmers' financial resources, enabling them to cover costs for seeds, fertilisers, and other agricultural needs, thereby boosting their capacity and reducing reliance on informal credit.
The Case for Continuity
The government's decision to approve a five-year extension, from 2026-27 to 2030-31, with an outlay of ₹3.15 lakh crore, is a clear vote for continuity. From a policy perspective, the logic is sound. The scheme's architecture is a proven success in terms of reach and transparency. By using Aadhaar authentication and a robust digital framework, it has largely eliminated intermediaries and ensured that the aid reaches its intended recipients, a significant achievement in public administration. Officials highlight that over ₹4.47 lakh crore has been transferred since the scheme's inception, providing a crucial buffer, particularly during the economic disruption of the COVID-19 pandemic. For the government, extending a popular and well-functioning programme provides predictable support and reinforces its commitment to farmer welfare without introducing the complexities and potential disruptions of a major overhaul.
The Redesign That Wasn't
While the extension secures the programme's existence, it also highlights a significant missed opportunity for redesign, a point raised by critics and economists. The core issue is the financial amount itself. The annual payment of ₹6,000 was set in 2019 and has not been increased since. In the intervening years, inflation has steadily eroded the purchasing power of that sum. One analysis suggests that by 2026, the ₹6,000 payment has the real-world value of roughly ₹3,990 from 2019. By the end of this new extension period in 2031, its value is projected to be less than half of what it was at launch. A redesigned scheme could have addressed this by indexing the payment to inflation or by increasing the base amount to reflect rising agricultural input costs. By opting for a simple continuation, the government has ensured the scheme's survival but has also effectively allowed for a slow-motion reduction in the real value of its support.
An Incomplete Picture
The debate also extends to the scheme's structure. In its current form, PM-KISAN provides a flat payment to all eligible farmers, regardless of the size of their landholding or their actual income level. A small-scale marginal farmer receives the same amount as a far wealthier landowner with significantly larger holdings. Furthermore, the scheme's focus on landholding means it often excludes landless tenant farmers, who are among the most vulnerable in the agricultural sector. Proponents of a redesign argue that a more sophisticated approach could better target support based on need, potentially offering larger sums to smaller farmers or creating mechanisms to include tenants. The current extension maintains this one-size-fits-all approach, favouring administrative simplicity over a more equitable and targeted distribution of funds.
