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Opinion | Why the Kisaan Samman Nidhi Yojana will not be effective

The design of the scheme is incongruous with the objective of supporting low income farmers, and even in states with decent land record systems, it is incapable of implementation without significant leakages.

February 14, 2019 / 01:02 PM IST

Bhargavi Zaveri

Under the PM Kisaan Samman Nidhi Yojana Scheme, the government proposes to pay an annual sum of Rs 6,000 to 12 crore small and marginal farmer families. The operational guidelines released last week spell out the design of the scheme.

Leaving aside the political motivations underlying the scheme, most commentary on the scheme has either bemoaned the paltry support of Rs 500 per month or critiqued the poor state of land records for identification of beneficiaries under the scheme. This article makes two arguments. First, that even if the per-family allocation under this scheme were to be increased, the design of the scheme is incongruous with the objective of supporting low income farmers. Second, even in states with decent land record systems, the scheme is incapable of implementation without significant leakages.

The scheme envisages income support to every “family comprising of husband, wife and minor children who collectively own cultivable land up to 2 hectare as per land records of the concerned State/UT”. There is a laundry list of exclusions — institutional land holders, families having at least one member of a “higher income status”, such as a practising chartered accountant, doctor or lawyer, persons who hold or have ever held a government job or a constitutional post, are some of them. Beneficiaries will have to self-declare that they do not suffer from any of the exclusions, and persons who incorrectly declare themselves as such, will be punished by law.

Issues of fairness


There are several issues of fairness associated with the identification of beneficiaries under the scheme. The operational guidelines clarify that existing land records will be used for the identification of the beneficiary-owners. A typical land revenue record evidencing the title to a land parcel will show three classes of persons who could, given the objectives of the scheme, be potentially deserving of farm income support — the owner, the occupant and the cultivator. In such cases, the cultivator or the occupant is most likely to be the farmer. Practices such as share-cropping, where the farmer is a tenant and shares a part of the crop-produce with the landlord, are common in India. It is unclear why in such cases, the owner of the land parcel and not the actual farmer should be entitled to the benefit.

The complexity and unfairness of identification is exacerbated where there are multiple owners of the same land parcel, a phenomenon fairly common in India. For example, in 2017, researchers at the Finance Research Group at the Indira Gandhi Institute of Development Research (IGIDR) undertook a study aimed at understanding the accuracy of digitised land records. In a pilot survey covering two districts in Maharashtra, they found that 62% of the land parcels studied had more than one owner, and 24% of such parcels had more than five owners per parcel. The operational guidelines of the scheme state that in cases of jointly-held land, the cash support would be credited to the bank account of the joint owner “with highest quantum of landholding”. While splitting the cash benefit among the owners would be virtually negating any potential utility of it, the person with the highest quantum of landholding is less likely to need farm income support, relative to a person whose farm holdings are smaller.

Similarly, exclusion of families with at least one perceived high income earner gives rise to questions such as whether the professional contributes to the farming activity and whether the income of the professional is utilised to support the purchase of farm inputs. Answers to these questions are not static, may vary from family to family, and for the same family, from time to time.

Issues of identification

Second, there are serious issues of identification of the beneficiaries included and those excluded. Currently, the identification is left to the states and union territories. In a statement to the press, the government claimed that through the Agriculture Census (2015-16), “every ‘Khesra’ of the plot of the land in the country has been counted”, land parcels have been grouped into different categories depending on their size, and all that is left is connecting the holdings to the family entitled to the direct benefit transfer (DBT). However, a review of the methodology used by the agriculture census will show that for at least 12 states in which land records are not well maintained, the data on land parcel size is obtained not through village-level land records, but through sampling surveys, which cover 20% of the villages “in each block”. Consequently, the utility of the agriculture survey data for targeting welfare benefits, is suspect. It is one thing to use sampling surveys to understand averages, quite another to create vested legal rights.

Similarly, it is unclear whether self-declaration will be an effective tool for the purpose of exclusion, especially for high income earners or professionals.

The scheme also does not take into account the dynamic nature of asset ownership, as it lays down February 1 as a cut-off date for determining the eligibility of beneficiaries, and stipulates that no changes after this date will be considered for the next five years, except where the land ownership changes owing to succession. Updating land records to reflect the change in ownership involves considerable delays depending on the administrative capacity of the tehsil that the parcel is located in.

The IGIDR study finds that even in a district with considerably high levels of digitisation, the time lags range from an average of 85 days for changes attributable to sale transactions to 110 days for inheritance-related changes. It is unclear how beneficiaries will be identified if the records are not updated or during the time-lag involved in the updating. Equally, the scheme assumes a constant number of land parcels and owners for a period of five years, which will naturally lead to exclusions.

Even for states where the land records have been digitised, they need not accurately reflect the reality on the ground. The IGIDR study finds that half of all the land parcels physically measured showed a deviation of more than 20% of the area mentioned in the land records. Since the eligibility criteria are directly linked to the size of the land parcel, such discrepancies may lead to leakages and over-inclusion as the actual land under occupation may exceed that reflected in the records.


The objective of a 'farm income support' scheme should be to support farmers whose income is insufficient for their sustenance, much less productive farming. For this reason, linking this scheme to land ownership is counter-intuitive. Moreover, the complexity of identification of beneficiaries and non-beneficiaries and depending on the edifice of a weak land records administration system, is likely to cost the Centre more than the estimated outlay of Rs 75,000 crore (translating to about 0.4% of the GDP).

Bhargavi Zaveri works with the finance research group at IGIDR. Views are personal.
Moneycontrol Contributor
first published: Feb 14, 2019 01:02 pm
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