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PM-Kisan – What Does Rs. 6,000 Mean?

Rs. 6000 Significant amount

The Chief Economic Advisor has said that the Rs. 6000 extended to farmers with land ownership up to 2 hectares under PM-KISAN forms about 16 percent of his annual income. Clearly in relative terms, one sixth of any annual income is not insignificant by any measure. When one considers the cost of daily living in a rural setting, an amount of Rs. 500 is no small amount even today.

What the critics have missed is that the amount announced is no real income but merely a form of support to the already earned income.

Why it is not a small amount

A media report published by the Hindustan Times has attempted to portray the extension of this Rs. 6000 support as constituting only 6 percent of a farmer’s income.

However going by HT’s own estimates arriving at the weighted average of income of all farmers owning up to 2 hectares of land (beneficiaries of PM-KISAN), it comes out to Rs 5,240 per month. When we place a support of Rs. 500 per month against that total amount, it turns out be a pretty significant 9.5 percent of a farmer’s monthly income.

Furthermore, when we assess the conditions of farmers with landholdings less than 0.01 hectare, the most marginalised among them, going by the same report which pegs their average nominal monthly income at Rs. 7,331, an additional support of Rs. 500 turns out to be about 6.8 percent of that income. This 6.8 percent is again not so small in relative terms.

If we consider the trends in inflation which has consistently come down over the last four years as compared to the years before, there is effectively more money in the hands of the farmer arming him with a higher purchasing power on the ground.

Farmer the master of his own income and expenditure

Until now, any scheme or programme announced for farmers by the government had been tied to some condition/s laid down by the government. The farmer could avail of a certain scheme and its benefits only when he also followed it up with subscription of another scheme or an expenditure of a certain amount, or anything as prescribed by the government. In other words, he was not the real decision-maker behind something that impacted him directly.

For the first time in the history of independent India, with the extension of this Rs. 6000 annual support in form of direct cash, the Modi government has sought to give a free hand to the farmer allowing him to make his own independent spending decision.

We have already seen how the government has consistently sought to raise MSPs for most crops. For a sector that employs more than 50 percent of the country’s workforce, this is no minor measure. Around 12 crore small and marginal farmer families are expected to benefit from this.

When PM Modi recently said in Leh, “PM-KISAN is a phenomenal scheme for farmers. People sitting in air-conditioned rooms in Delhi do not know what Rs 6,000 mean for a poor farmer living in distant and difficult areas of the country,” the chatterati in the AC rooms are reminiscent of the French Queen who had infamously made the insensitive quip of ‘let them eat cake’ for starving peasants who had no bread to eat. A sum of Rs. 500 is definitely bread for them, and not cake, whatever the critics may say.