What is the standard income of a small farmer?

NP NEWS 24 ONLINE:  In the declaration of Annual Budget of 2019, Modi government has enhanced the agriculture sector by announcing the ‘PM Kisan Samman Nidhi’, the package which costs the government 75,000 cores and covering 12.5 crore farmers. According to the scheme, farmers who own land up to two hectares will get Rs 6,000 every year. Farmers will receive money in their accounts directly, in three tranches.

Which means, the government has increased the Minimum Support Price (MSP) so as to fulfill the aim of doubling farm income. Whereas, a fund of Rs. 60,000 crore is also being allocated to the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) presently.

An hour later, Congress president Rahul Gandhi tweeted “ Dear NoMo, 5 years of your incompetence and arrogance has destroyed the lives of our farmers. Giving them Rs. 17 a day is an insult to everything they stand and work for.”

Days later, PM Narendra Modi clarified “ PM-KISAN is a phenomenal scheme for farmers. People sitting in air conditioned rooms in Delhi do not know what a Rs 6,000 mean to a poor farmer living in distant and difficult areas of the country.”

Sadly, none of them unveiled the main concern, how much is the average income of a farmer?

According to chief economic advisor Krishnamurthy Subramanian quoted that “Rs 6000 announced in the scheme is actually one-sixth, or 16.66%, of their annual income and hence it is not a trivial amount”.

According to an analysis, an average Indian farmer earns around Rs 10,329 per month in 2018-19. Which means an annual payout of 6,000 would be less than 5% of the annual income of 1,23,948 Rs that the average Indian farmer currently earns.

The National Sample Survey Office published a report in 2016 which consisted the data of year 2012-2013 which stated that an average agricultural household earned Rs 6,426 per month, or Rs 77,112 per year, in India. The NSSO’s report also shows that the target group under PM-KISAN accounts for 87% of the total number of agricultural households in the country.

The NSSO report also gives monthly incomes for farmers’ in each decile class in 2012-13. Using the method described above shows that all farmers in India would have had a monthly income of more than Rs 6,000 in 2018-19.

The analysis further shows that Rs 6,000 would be less than two-thirds of the monthly income for more than half of agricultural households in 2018-19, if the income distribution given in the NSSO report were to hold today.

Interestingly, India’s agriculture budget has doubled in the past five years to a whopping Rs 57,600 crore in 2018-19 under Modi government, which happens to be thrice of the UPA government budget in 2013-14. The highest increase has been about 79 percent in 2016-17.

The budget also mentioned that farmers who are severely affected by natural calamities will not only get 2% interest subvention, but also an additional 3% interest subvention upon timely repayment.

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