Having taken a beating in the recent state elections, Finance Minister Piyush Goyal on Friday loosened the purse strings of farmers by announcing direct income support of Rs 6,000 for small and marginal farmers with the first instalment likely to be paid soon.
Presenting the Interim Budget, Goyal announced the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) to provide income support of Rs 6,000 per year for farmers holding cultivable land of up to two hectares, a move that would benefit nearly 12 crore farmers.
"The programme would be made effective from 1st December 2018 and the first instalment for the period up to 31st March 2019 would be paid during this year itself," Goyal said.
He said the centrally-funded scheme would not only provide assured supplemental income to the most vulnerable farmer families but would also meet their emergent needs, especially before the harvest season.
The urgency showed by the government to deposit the first instalment of Rs 2,000 this year itself is indicative of the tremendous heat it is facing from farmers, which was evident from the drubbing it received in the Hindi heartland states of Madhya Pradesh, Rajasthan and Chhattisgarh.
The Modi government also appeared to be under pressure after a slew of farm loan waivers announced by the new Congress governments in the three states within days of assuming power.
The PM-KISAN initiative will cost the government Rs 20,000 crore in the current financial year and Rs 75,000 crore in 2019-20 fiscal.
Goyal also announced that farmers severely affected by natural calamities would get 2% upfront interest subvention on crop loans and an additional 3% subvention upon timely repayment.
The total Budget allocation for agriculture and allied activities is projected higher at Rs 1,49,981 crore for 2019-20 fiscal when compared to the revised estimate of Rs 86,602 crore for this fiscal.
The fertiliser subsidy is pegged at 74,986 crores for the next fiscal as against Rs 70,075 crore.