Modi announces expansion of income scheme for farmers

Implementing its three key parliamentary election promises a day after assumption of power, the new Indian government of Prime Minister Narendra Modi announced expansion of an income scheme for farmers and a new pension scheme for agriculturists, small traders and self-employed persons.

These decisions were approved at the first meeting of Modi's new cabinet on Friday evening, reports our New Delhi correspondent.

The cabinet okayed extending the ambit of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) to all farmers irrespective of their land holding.

The scheme, under which Rs 6,000 would be provided a year to farmers to support their income, was first proposed in the interim budget presented in parliament ahead of the parliamentary polls in February. At that time, the scheme was applicable only to small and marginal farmers who two hectares or less of land.  

The revised scheme cleared by the cabinet would cover around two crore more farmers, increasing the coverage to about to 14.5 crore beneficiaries, with an additional expenditure of Rs 12,000 crore.

The total estimated expenditure for the scheme would be Rs. 87,217.50 crore for the financial year 2019-20, an official statement said on Friday. 

The scheme was launched in a record time of three weeks on February 24 and so far two instalments of the income support scheme benefitting 5.77 crore farmers have been credited directly to the bank accounts, said the statement.

The cabinet also approved a pension scheme for farmers for the first time in India under which an estimated five crore small and marginal farmers will benefit in the first three years itself. 

The government would spend Rs. 10,774.50 crore for three towards its contribution (matching share) for providing social security cover as envisaged under the scheme.

The scheme envisages a voluntary and contributory pension scheme for all small and marginal farmers with the entry age ranging from 18 to 40 years with a provision of minimum fixed pension of Rs.3,000/- on attaining the age of 60 years.

A beneficiary farmer is required to contribute Rs 100/ - per month at median entry age of 29 years and the government would also contribute to the pension fund an equal amount as contributed by the eligible farmer. 

After the subscriber's death, while receiving pension, the spouse of the scheme's beneficiary will be entitled to receive 50% of the pension received by the beneficiary as family pension, provided he or she is not already a beneficiary of the scheme. 

An interesting feature of the scheme is that the farmers can opt to allow his or her monthly contribution to the scheme to be made from the benefits drawn from the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme directly. Alternatively, a farmer can pay his monthly contribution by registering through Common Service Centres (CSCs) under MeitY.