Income tax paying farmers may be excluded from income scheme

The government is likely to exclude farmers who are paying income tax from its Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan) even if they fulfil the criteria of having landholding less than two hectares (around five acres) in order to precisely target the income support scheme at the distressed farmers.

Finance minister Piyush Goyal announced the PM-Kisan scheme in the interim Budget for the next fiscal. The government will directly transfer Rs 6,000 per farmer family every year in three tranches of Rs 2,000. They have estimated a total cost of Rs 75,000 crore for providing direct income to 12 crore farmer families across all states in the country.

Since the farmer income plan will be retrospectively implemented from December 1, 2018, the government has budgeted Rs 20,000 crore for the first instalment of Rs 2,000 before March 31. This is before the election code comes into force for the general elections in May this year.

The central government will be dependent on the states to launch the PM-Kisan. The details of farmers' landholdings, their bank account and other specified information for the scheme will be furnished to it by the states.

Madhav B Kelkar, director and secretary, Department of Agriculture – Goa, told DNA Money the central government had not yet approached them for farmer data or any guideline for the scheme.

He, however, said the central government has told the state it would require a list of farmers who are not paying income tax.

Kelkar said farmers who were paying income tax would not be included in PM-Kisan despite meeting the landholding criteria.

"Even if you (farmer) are having land (less than two hectares), but if you are an income tax payer then based on that you will not be eligible. That is what we have been told," he said.

The agriculture ministry official said this could see half of the farmers owning land less than two hectares in the state fall off the list.

"If the income tax criterion is included in the guidelines, then close to 50% of the 33-34,000 Goan farmers who own Krishi card will be excluded from the scheme," he said.

Krishi Card, a digitally-coded smart card, launched in 2014 by the Goa government helps farmers to avail subsidies without producing documents.

Goa's agriculture minister Vijai Sardesai, told DNA Money land records and other farmer details were well documented in the state because of Krish cards.

"It (Krishi card) is a smart card for the farmer in which every information, including bank details, how much the farmer earns, how much is his landholding, whether he is a landless farmer and other such information, are available. We already have a list of farmers in place. We are quite well off when it comes to farmer data," he said.

Kelkar said once the government issues the guidelines, the state government will get down to mapping the farmer data.

"Those details will have to be worked out. Right now, we don't know the exact guidelines," he said.

According to him, landholding details will be easily accessed but information on income tax may be difficult to extract. "No farmer will tell me how much income tax he has paid," he said.

Kelkar believes the government will be able to transfer the first payout of Rs 2,000 to farmers before March 31.

"I feel they (central government) will be paying it (first instalment) before March 31. Though, I have not received anything in writing from them on the farmers' data needed by them," he said.

Pravesh Sharma, co-founder and CEO, Kamatan Farm Tech Pvt Ltd, said the speed of the scheme's implementation was hinged on how fast the government is able to collect data on farmers.

"If the details of the farmers are made available, the actual (money) transfer should not be an issue. Once you have the names and bank accounts of farmers then the central government have to only instruct banks to transfer the amount to the farmer's account," he said.

For farmer information, Sharma believes the central government would have to heavily rely on the state governments.

"When a state government announces such scheme, they are the ultimate implementing authority because they have access to the land records. The central government does not have access to farmer's details. This scheme is going to be dependent on state government furnishing a list of farmers, which means that the state government has some leverage in deciding who is going to get it, not the central government," he said.

Sharma also wondered how the money would be transferred to farmers in some of the northern and north-eastern states which were not adequately covered under the banking system.

"They are saying it (cash income benefit) will be deposited in bank accounts. I don't understand how, because in many north and northeast regions banks are on an average 50 kilometres away. The density of bank branches in these areas is much lower than western and southern India. How are people going to access money in these states?" he said.

BUMPER HARVEST

• Rs 6,000 – The government will directly transfer per farmer family every year
   
• Rs 75,000 cr – Estimated total cost for providing income to 12 cr farmer families

THE FINE PRINT

• In states like Goa, it could exclude close to 50% of the farmers fulfilling the landholding criteria
   
• The central government has told the state it would require a list of farmers who are not paying income tax