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Journal of Income & Wealth (The)
Year : 2019, Volume : 41, Issue : 1
First page : ( 177) Last page : ( 187)
Print ISSN : 0974-0309. Online ISSN : 0974-0295.

Macro-economic impact of income support programme for farmers in India

Sharma Akhilesh K.

Assistant Professor, Institute for Studies in Industrial Development, New Delhi, India Email id: aksbhu2608@gmail.com

JEL Classification Code: Q18, O23, H53, E16

Online published on 21 August, 2020.

Abstract

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme is a recently introduced income support programme, fully sponsored by the Central Government, for marginal and small farmers holding land less than 2 hectares. Under this programme, each farmer is provided INR 6000 per year in three instalments of INR 2000. The Government of India has made budgetary provision of INR 750 billion for the year 2019–20. Given the farmers’ distress in the country, there is a need to analyse the economic impact of this scheme and find out its possible impact on farmer's income. This study aims to analyse the impact of the PM-KISAN scheme in India through SAM multiplier analysis vis-à-vis a counterfactual – fertilizer subsidy programme for formers. The key findings indicate that PM-KISAN scheme has huge positive incremental impact on farmers’ income along with on other macro-economic indicators like output, grass value added, government revenue, savings and trade. In comparison to input (i.e. fertilizer) subsidy scheme, PM-KISAN scheme has more positive incremental impact on farmer's income and growth of agriculture sector. Therefore, if a government aims to augment income of the farmers, it should implement schemes like income support programmes.

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Keywords

Farmer's income, PM-KISAN Scheme, Fertilizer subsidy, Macroeconomic impact, SAM multiplier.

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