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Data: Recovery of Amounts Transferred to Ineligible Beneficiaries Under PM KISAN Still Low

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Since the launch of the PM KISAN scheme, amounts have been transferred to beneficiaries in 12 instalments so far. The greatest number of beneficiaries of the scheme was during the 11th instalment (April to July 2022) with 10.45 crores which is still less than the projected the beneficiary number of 14.5 crores. Even the recovery of amounts transferred to ineligible beneficiaries is very low. 

Farming is a risky profession owing to its extreme dependence on climatic conditions. Given the importance of food security for all, these uncertainties justify the crucial role of governments in providing a safety net for farmers. One key factor in determining the safety net is the costs of production. With rising input costs, they end up using a higher portion of their working capital on input costs while making less money. Input costs of production should not be allowed to exert an additional burden on the farmers.

To mitigate the hardships due to rising input costs and to address the liquidity constraints of the farmers, the Government of India launched an income support scheme, Pradhan Mantri Kisan Samman Nidhi (PM KISAN), which provides an income support of Rs. 6,000 per year to every landholding farmer, to be paid in three equal installments before every crop season. It has the characteristics of Universal Basic Income (UBI) but is restricted to only farmers. It is on the lines of similar schemes launched in states like Telangana, Odisha, etc. 

In this story, we look at some of the statistics relating to PM-KISAN since the inception of the scheme. 

Consistent increase in the number of beneficiaries

The Government had paid twelve instalments since the inception of the scheme in 2018. Over these twelve instalments, the number of beneficiaries who had received the income support varies largely. While some extent of additions and removals can be attributed to the constant revision of list of eligible beneficiaries, large variations in beneficiaries raises pertinent doubts. 

Each installment is categorized as a period, and accordingly, the beneficiaries have been mapped. The first installment had 3.16 crore beneficiaries, while the second installment had 6 crore beneficiaries, owing to the extension in eligibility criteria from the initial 2-hectare limit to all farmers. The number of beneficiaries saw a consistent increase for each period, except the 12th period which registered a decline by almost 20%. The amount released corresponds to the number of eligible beneficiaries.

Substantial proportion of farmers yet to receive the benefits

The PM-KISAN scheme was initially restricted to farmers owning land up to two hectares. Subsequently, the scheme was extended to cover all land-holding farmers irrespective of the size of land holding subject to an exclusion criterion. The exclusion criteria include all serving and retired officers and employees of the government, public sector enterprises, and autonomous institutions under the government, including local bodies (except class IV and group D employees), as well as farmer families with at least one member holding a constitutional office, serving in the legislature, or serving as a mayor or chairperson of a municipal corporation, professionals such as engineers, lawyers, doctors, Chartered Accountants, and any person who had paid income tax in the previous assessment year are excluded from the programme.

As per a parliamentary answer from July 2019 when the scheme was restricted to small and marginal farmers with land holdings below 2 hectares, the number of beneficiaries added up to 12.5 crores. With the expansion in the coverage, an additional estimated two crores’ farmers are expected to be covered. This takes the total eligible farmers to 14.5 Crore.

After the extension, the eligible farmers stood at 14.5 Crores. However, considering the maximum number of beneficiaries receiving the benefits under the scheme till the 12th installment, only 10.45 Crore had received benefits, amounting to a shortfall of 28% below the estimated number. If we consider the latest number of the 12th installment, the number of beneficiaries comes up to 8.42 crore, the shortfall in the disbursal comes up to 42%. 

Lower registrations than the projected number of eligible farmers could be due to a variety of factors, including problems with initial estimates.

  • The government estimated numbers are too high as they were based on the land parcel holdings from the Agriculture Census 2015-16. In reality, a farmer could own multiple land parcels.
  • Severe gaps exist in process disbursal mechanism to eligible farmers in form of.
    • The absence of accurate and clear land records
    • The sluggish verification of data for Aadhaar/Aadhaar seeding
    • Issues with banking systems such as incorrect details, failed transactions, and dormant accounts among others. 

Region-wise PM-KISAN beneficiaries

To get a fair understanding of the share of beneficiaries in different states, a region-wise analysis is done. States have been categorized as per their geographical location. Northern Region includes states like Punjab, Haryana, Uttar Pradesh, Uttarakhand, and Himachal Pradesh. The western Region includes states like Rajasthan, Gujarat, Maharashtra, and Goa. Eastern Region includes the States of Bihar, West Bengal, Jharkhand, and Odisha. Central India comprises of Madhya Pradesh and Chhattisgarh, and Southern Region includes the states of Andhra Pradesh, Telangana, Tamil Nadu, Kerala, and Karnataka. 

The northern region accounted for almost 25% of the total beneficiaries, followed by the western region with 23%, the southern region with 19.5%, and the Eastern region with 18.6%. Two states in Central India accounted for 12% of the total beneficiaries. 

Accordingly, if we map the share of landholdings in these regions, the Southern region accounts for 26% of the total landholdings with an average landholding size of 0.86 hectares (ha.), followed by the Eastern region with 21.4% having an average landholding size of 0.63 ha., Northern region with 19.4% with an average landholding size of 0.86 ha., and Western region with 19.35% having average landholding size of 1.82 ha., and Central India with 6.8% with average landholding size of 1.47 ha. 

A higher share of landholdings with a comparatively lower average size of landholding should ideally account for more beneficiaries and vice versa. But the trend in the number of PM KISAN beneficiaries does not mirror this. While the shortcomings in the implementational aspects could be a reason behind such a contrary trend, the possibility of ghost beneficiaries could also be a reason. 

87% rise in fund transfer to Ineligible or ghost beneficiaries

Under the PM-KISAN’s framework, respective State/UT administrations are responsible for identifying the beneficiaries of the Scheme and submitting their accurate and verified data on the PM-KISAN portal. Benefits of the Scheme are deposited directly into the bank accounts of eligible beneficiaries upon receipt of accurate and confirmed beneficiary data, which is then validated through the Aadhar/PFMS/Income Tax database. As per the scheme’s guidelines, States/UTs must conduct physical verification on 5–10% of the beneficiaries to ascertain their eligibility. As per 10% Physical Verification Report, 2021-22, 4.4% of beneficiaries were found to be ineligible out of the total 64 lakh verifications carried out.

As per a parliamentary question, as of January 2021, an amount of Rs. 2326 Crores had been transferred to more than 30 Lakh ineligible beneficiaries under PM-KISAN. Three states Tamil Nadu, Assam, and Punjab accounted for more than 50% of these ineligible beneficiaries, and if Gujarat, Maharashtra, and Madhya Pradesh are also included, this would account for more than 75% of the total ineligible beneficiaries.

The amount transferred for ineligible beneficiaries increased to more than Rs. 4352 Crore by March 2022. In a span of one year, the fund transferred to ineligible beneficiaries rose by 87% from Rs. 2326 crores to Rs. 4352 crores. The recovery during the same period increased from Rs. 232 crores to 297 Crores, improving by merely 28%.

Need for an accurate and timely database of farmers and farm holdings in India

India conducts its agriculture census every five years. The most recent was completed in 2015–16. Also, the agriculture census counts the number of land parcels, and not the number of farmers using it. In practice, situations like a farmer owning two farms or two families operating on one piece of property, sharing ownership of the land, are not accounted for when designing the PM KISAN scheme based on the Agriculture Census 2015-16. 

There is a lot of ambiguity surrounding the number of farmers and landholdings in India. For instance, 11.8 crore people in the country are cultivators, as per the 2011 Population Census. The number of farmers according to the issued soil health cards varies as well. In cycle 1, from 2015 to 2017, 10.74 Crore soil health cards were given, while in cycle 2 from 2017 to 2019, 11.69 Crore soil health cards were distributed. These are provided to each farm holding in the country.

Given that huge amount of funds is being pumped into the direct benefit transfer schemes to support agriculture and aid farmers in efficient farming, it is high time that government creates a comprehensive database of both farmers and farm holdings, which is both accurate and timely. 

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