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Performance of Universal Basic Income Programme in India: A Case of PM-KISAN Scheme
Performance of Universal Basic Income Programme in India: A Case of PM-KISAN Scheme
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ABSTRACT
The study analysed the performance of the states with respect to the implementation of universal basic income programme
for farmers i.e., PMKISAN scheme. It is observed that a large proportion of total number of PMKISN beneficiaries belongs
to Uttar Pradesh (22 %),followed by Maharashtra (10.2 %) and Madhya Pradesh (7.2%). Large variation in performance of
the states as reflected from the proportion of beneficiaries to potential beneficiaries is observed. The states like Manipur,
Punjab, Andaman & Nicobar Islands, Assam and Haryana rank high while the states like Sikkim, Goa, Lakshadweep,
Puducherry, Tripura, Bihar, etc., are lying at the bottom. The factors that are responsible for improving the performance of
the relatively poor performing states are greater financial access to farmers, infrastructural improvement and greater spread
of technology dissemination. It is also suggested that the states should focus on digitization of land records and Aadhar
seeding with bank accounts of prospective beneficiaries.
Key words: Cash transfer scheme, discriminant function analysis, PMKISAN, universal basic income.
INTRODUCTION continued for long due to the kind of fund needed for its
operation. The experiment being conducted by the NGO
Various social protection schemes are in operation in GiveDirectly in Kenya is one of the few were the transfers
different countries with almost similar meaning and are given to all adults within selected communities and
content like, Universal Basic Income, Social Protection over more than a decade (Banerjee et al., 2019). The UBI
Floor, Guaranteed Minimum Income, Universal Social programme being implemented in various parts of the
Protection, etc (Ortiz et al, 2018). The Union Finance world has varying impact on socio-economic conditions
Minister Shri Arun Jaitley has advocated the concept of of the people. It is found to have a significant positive
Universal Basic Income (UBI) as an alternative to the effect on household expenditure, household coping
various social welfare schemes in an effort to reduce strategies, school enrollment, shift to nutritious food,
poverty (GoI, 2016-17). The Survey showed that a UBI increased in health/education spending, decreased early
that reduces poverty to 0.5 percent would cost between 4- pregnancy; increased labour supply; increased living
5 per cent of GDP, assuming that those in the top 25 per standards, etc (Attanasio and Mesnard, 2006; Aker et al.,
cent income bracket do not participate. On the other hand, 2013; Akresh et al., 2013; Baird et al., 2013; Blattman et
the existing middle class subsidies and food, petroleum al., 2013; Duryea and Morrison 2004; Michael 2018).
and fertilizer subsidies cost about 3 per cent of GDP (PIB, Agriculture in India is confronted with indebtedness,
2017). The UBI scheme has financial implications for the climatic risk and price volatility (Joshi, 2018). To
countries economy. In most cases it has not been overcome these, the government of India has initiated a
number of schemes like Pradhan Mantri Fasal Bima Yojna
1.
Research Scholar, 2&6, Principal Scientists, 3&5. Senior Senior Scientists, Division of Agricultural, Economics, ICAR–IARI, 4. Principal Scientist, Division
of Agricultural Extension, ICAR–IARI, New Delhi and 7. Scientist, Section of Extension and Social Sciences, CTCRI, Thiruvananthpuram, Kerala.
2 INDIAN JOURNAL OF EXTENSION EDUCATION
(PMFBY), Pradhan Mantri Krishi Sinchayee Yojna health card issue, area under micro-irrigation, number of
(PMKSY), Soil Health Card (SHC), National kisan credit card issued, etc were collected from
Agricultural Market (eNAM), market reforms, etc. GoI(2019b). The performance of states was studied in
However the farm distress continues to plague rural India. terms of proportion of beneficiaries as compared to
As a result the Prime Minister Kisan Samman Nidhi Yojna potential beneficiaries' i.e. based on number of
(PMKISAN) scheme was introduced in the country on operational holdings is analysed. State-wise proportion of
th st
24 February 2019 and became effective from 1 beneficiaries receiving a different number of installment
December 2018. The scheme is a Universal Basic Income amount was studied and the amount disbursed per hectare
Programme for farmers to be given in Direct Benefit of gross cropped area was analysed. Gap in the coverage
Transfer mode (DBT). The scheme is intended to fuel of potential beneficiaries and Kisan credit card accounts
demand in rural economy, to enable the farmers to buy was considered.
inputs for agriculture and allied sector as also for meeting
their personal needs. The scheme is hailed as an efficient Discriminant function analysis is used to identify
one over the loan waiver and subsidy programmes as the factors that differentiate between poor performing state
money is transferred directly into the farmers account. A and good performing states (Manaswi et al., 2018). It
sum of ` 2000/- is given before each of the three crop helps to classify individuals into two or more distinct
seasons with the aim that the farmers would use it for the groups, based on multiple characteristics, which when
purpose of buying of inputs for agriculture. So far five considered singly may not indicate the presence of
installments have been disbursed. It is being suggested distinct groups. It maximizes the distance “between the
that the amount of support should be higher and inflation groups” in relation to the variance “within the groups”, so
linked, bottom up approach should be followed in as to help in discrimination.
execution, tenant and agricultural labours too should be
brought under the ambit of the scheme, etc. Since the The functional form of the model is as follows,
scheme dolls out money it is expected that large
proportion of farmers would turn up to avail the facility. Y=DiXi
However, it is observed that only 62 per cent of potential
beneficiaries have joined the scheme despite massive Where 'Y' serves as a discriminant value for
campaign by the government. The performance of the classification. Diis the unknown weights assigned to
scheme varies across the states, with some states are different characteristics. Xi are operational holdings (No),
observed to be doing good while some are observed to be Storage capacity (tons), bank branches (Nos.), KCC
not doing so good. It is therefore important to analyse the advances per account (`), Gross cropped area (ha), Soil
performance of the states with respect to performance in health card per GCA (Nos.) and rural roads per GCA (Km/
the scheme. It is more important to understand the reasons ha) were selected to classify the states into either high
for poor performance and how it could be improved. The performing or low performing groups.
novelty of the study is that other studies have evaluated
the impact of the UBI scheme. Since India is big and is The unknown 'D' coefficients were calculated with
very diverse the implementation of such a massive the formula (i= 1,2,…., p). Where di is the distance
programme which is expected to benefit 14 crore farmers between the means of the two groups, good and bad
th
is a major issue. The study was therefore taken up with performers, for the i character and sii are the pooled
following specific objectives to classify the states into the variance from the two groups for the ith character. Then Y1
good performing and relatively poor performing states, and Y2 values are computed using the following formula,
and find the factors that can help the two groups of states
come together in terms of performance of PMKISAN
scheme.
METHODOLOGY
scheme. The scheme was launched and the benefits were Chandigarh 457 0.0 Mizoram 83206 0.1
transferred to registered farmers accounts from 24th Feb Chhattisgarh 2268812 2.4 Nagaland 196796 0.2
st
2019. From 1 June 2019, the scheme was extended to all Dadra & Nagar Haveli 10744 0.0 Odisha 3687816 3.8
the farmers having cultivable land irrespective of land Daman and Diu 3675 0.0 Puducherry 10478 0.0
size, i.e., the scheme was extended also to farmers' having Delhi 14262 0.0 Punjab 2342402 2.4
cultivable land more than 2 hectares. After completion of Goa 9571 0.0 Rajasthan 6396235 6.7
one year of successful implementation of the scheme, the
Gujarat 5271337 5.5 Sikkim 8877 0.0
government has started the massive campaign to saturate
Haryana 1645578 1.7 Tamil Nadu 3873357 4.0
all the PM-KISAN beneficiaries with KCC account i.e.,
4 INDIAN JOURNAL OF EXTENSION EDUCATION
Himachal Pradesh 888956 0.9 Telangana 3600362 3.8 Kerala 3006802 7705060 39.0
Jammu and Kashmir 1021830 1.1 Tripura 204507 0.2 Lakshadweep 1516 9471 16.0
Jharkhand 1716347 1.8 Uttar Pradesh 21920973 22.9 Madhya Pradesh 6871205 10569968 65.0
Karnataka 5090886 5.3 Uttarakhand 768324 0.8 Maharashtra 9799936 16049518 61.1
Kerala 3006802 3.1 Manipur 324414 151495 214.1
Total Beneficiaries 95933177 100 Meghalaya 118235 241817 48.9
results revealed that eight factors were discriminating the the scheme. Thus the gap between the states reduces. The
states into two groups to the maximum extent. It can be higher is number of bank branches and greater is the
inferred from Table 4 that, the soil health card issued per storage capacity in a state means the state has adequate
GCA was the significant variable which has highly infrastructural facilities which are needed to reduce the
influenced the discrimination to the extent of 32.99 per transaction cost incurred while availing benefit under any
cent of all the variables under study. Further, the variables scheme. The higher the infrastructural facility the poor
like operational holdings (18.77%), rural roads per GCA states also mode up The micro-irrigation area per gross
(15.78%), KCC advances per account (10.58%), gross cropped area is a reflection of technological change
cropped area (9.09%), and micro irrigation per GCA leading to demand for other complimentary inputs like
(6.20%), bank branches (5.22%), and storage capacity fertilizer, plant protection chemicals, labour, etc which
(1.37%) contributed to the maximum extent towards the demand money and PMKISAN forms a easy source to
gap between the good and poor performing states with acquire and use capital in agriculture. Thus, with growth
respect to the status of PM-KISAN in the country. and adoption of such technology leads to bridging in gap
Variables like KCC advances per account, gross cropped between poor and good performing states.
area and soil health card issued per GCA were positively
influenced the gap between the states with good and poor CONCLUSION
status of PM-KISAN in the country. Operational
th
holdings, storage capacity, bank branches, micro The PMKISAN scheme was launched on 24 Feb
irrigation per GCA were found to negatively influence the 2019 and was effective from 1st Dec 2018. So far 9.59
gap between the states with good and poor status of PM- crores of farmers are registered under the scheme. The
KISAN in the country. large proportion of the beneficiaries come from the states
of Uttar Pradesh (22.9%), Maharashtra (10.2%), Madhya
Table 5: Discriminant function coefficients for factors Pradesh (7.2%), Bihar (6.7%), Rajasthan (6.7%), Gujarat
influencing status of states with respect to (5.5%), Andhra Pradesh (5.4%) and Karnataka (5.3%).
PMKISAN scheme Initially the scheme was meant for small and marginal
Variables Coefficient Strength of contribution farmers and on 1st June 2019 the scheme became operative
Operational holding (No) -1.072 18.77 for all the size class of farmers. One of the major reasons
Storage capacity -0.078 1.37 for slow progress of the scheme as revealed from the
Bank Branches (No) -0.298 5.22 proportion of potential beneficiaries covered is due to
KCC advances per account (`) 0.604 10.58 extension of the scheme benefits to all the farmers after a
Gross cropped area (Ha) 0.519 9.09 lag period of 7 months. The exclusion criteria that is
Micro irrigation per GCA (No/ha) -0.354 6.20 inbuilt in the scheme is another reason for confusion
Soil Health card issued per GCA (No/ha) 1.884 32.99
among the beneficiaries leading to slow progress in
Rural roads per GCA(Km/ha) -0.901 15.78
joining the scheme. Many states have lagged behind in
performance of the scheme with less than 65 % of the
If the farmers receive adequate and hassle free loans potential beneficiaries been covered so far. Among those
as offered by KCC then the farmers will have lesser in this group are many are not so developed or
problem and are likely to be less inclined to schemes like underdeveloped states like Bihar, Jharkhand, Chattisgarh,
PMKISAN to meet the input requirement of farming. etc. The factors which would improve the functioning of
Similarly, if the gross cropped area is large for a state the poor states and could bring them on nearer to the good
means larger geographical area has to be covered performing states is operational holding (Nos.), Bank
demanding more infrastructure and resource to include branches (No.), storage capacity, rural roads (Km per
the beneficiaries under the scheme. The Soil Health Card GCA), micro irrigation (Nos. per ha), etc. The states
is positively related to distance between the good and poor should open more and more bank branches as it is an
status. Soil health card is a government of Indias' scheme indication of the access to financial services being
to provide the record of the status of health of soil of available to the people. The focus of the states should be to
farmers field at free of cost. The easy availability of Soil enhances access to financial services to the rural
Health Card reveals how the other income transfer and inhabitants. The storage capacity and rural roads are an
subsidy related schemes are flowing to the residents of a indication of infrastructural facilities. The states should
state. If the residents of a state are benefited by multiple improve the infrastructural facilities which will help the
programmes they may not find the PMKISAN that farmers to come forward and join the developmental
attractive and hence the distance between the two group of schemes like PMKISAN. The micro irrigation is an
states further increases. The higher is the number of indication of technological advancement and its access.
operational holding then more number of beneficiaries The states should increase the access to improved
would be there who come forward and seek the benefit of
PERFORMANCE OF UNIVERSAL BASIC INCOME PROGRAMME IN INDIA: 7
A CASE OF PM-KISAN SCHEME
technology which will inturn create demand for Banerjee A., Niehaus, P., Suri T. (2019) Universal basic
additional capital. Any technology in itself is not that income in the developing world, Annual Review of
paying rather it demands investment in complimentary Economics, vol 11(1):Pp959-983.
resources to be able to generate the needed result. It is thus
concluded that the states who are lagging in performance Blattman, C. and Fiala, N. and Martinez, S., (2013)
with respect to the PMKISAN scheme should focus on Generating Skilled Self-Employment in Developing
embracing new technology, develop infrastructural Countries: Experimental Evidence from Uganda
facilities, enhance the access to financial services. It is (November 14, 2013). Quarterly Journal of Economics,
also suggested that the states should focus on digitization Forthcoming. Available at SSRN: https://ssrn.com/
of land records and Aadhar seeding of prospective abstract=2268552 or http://dx.doi.org/10.2139/ssrn.
beneficiaries. This will help in easy identification of 2268552
beneficiaries of the scheme and avoid the anomalies of
extremely low and high (> 100 %) proportion of Choudhury, R. (2020) Assam to re-verify PM-KISAN
beneficiaries to the prospective beneficiaries as is beneficiary list, orders probe, https://www.ndtv.com/
observed in many states. india-news/assam-to-re-verify-pm-kisan-beneficiaries-
list-orders-probe-2231129
Paper received on : April 02, 2020
Accepted on : May 25, 2020 Duryea, S. and A. Morrison* (2004) The Effect of
Conditional Transfers on School Performance and Child
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