In a major push to boost rural consumption, the Modi government in its first Cabinet meeting decided to cover all the farmers, irrespective of their land holdings, under PM Kisan scheme that promises to transfer Rs 6,000 in their bank accounts.
The revised scheme envisages to cover 2 crore more farmers with an estimated expenditure of Rs 87,217.50 crore in 2019-20. The previous government had estimated annual expenditure of Rs 75,000 crore in the earlier version of the scheme.
"The Union Cabinet chaired by Prime Minister Narendra Modi approved the extension of PM-Kisan Yojana to all farmers. Nearly 14.5 crore farmers would now benefit from the scheme," said Agriculture Minister Narendra Singh Tomar, briefing the media about cabinet decisions.
In another major decision, Tomar said the Cabinet also approved the Pradhan Mantri Kisan Pension Yojana under which small and marginal farmers will get a minimum fixed pension of Rs 3,000 per month on attaining the age of 60 years.
In the initial phase, the government will cover minimum 5 crore small and marginal farmers in the first three years," he said, adding that this would cost Rs 10,774.5 crore per annum to the exchequer.
This scheme is a voluntary and contributory pension scheme for small and marginal farmers across the country, with the entry age of 18-40 years, he said.
50m traders are expected to join the scheme in the next three years, said Union Minister Prakash Javadekar .
"All shopkeepers and self-employed persons, as well as retail traders with GST turnover below Rs 1.5 crore ($217,000) and aged between 18-40 years, can enrol for the scheme," an official statement said. The government will make a matching contribution in the subscribers' account, the statement added.
The scheme provides a minimum monthly pension of Rs 3,000 to all shopkeepers, retail traders and self-employed persons after they reach the age of 60 years.
Interested persons can subscribe to the scheme through over 325,000 common service centres spread across the country.
Praveen Khandelwal, secretary general of the Confederation of All India Traders, said that the pension plan has been one of the key demands of the trading community.
Cabinet in its meeting also approved a new scheme that assures minimum monthly pension of Rs 3,000 to all shopkeepers, retail traders and self-employed persons after attaining the age of 60 years.
The decision taken at the Union Cabinet meeting chaired by Prime Minister Narendra Modi will benefit 3 crore, retail traders and shopkeepers.
The Cabinet has also approved Rs 13,343 crore programme for control Foot and Mouth Disease (FMD) and Brucellosis. These diseases are common among livestock- cow-bulls, buffaloes, goats, sheep and pigs.
The decision is expected to address the farm sector distress that has gripped the rural economy for some time now. One of the key contributors to the GDP growth, the agriculture and allied activities shrank in the financial year 2018-19.
As per the official data released on Friday, the agriculture sector grew at 2.9 per cent in FY-19 as against the growth rate of 5 per cent in the previous year.
A month before the Union Budget, the decision to expand the PM Kisan scheme shows government's priority accorded to the farm sector. Many policy experts have stated that higher spending in rural areas would boost economy and could be growth driver.
Announced in the Interim Budget last February, the PM Kisan had covered 12 crore farmers in the country promising to transfer Rs 6,000 in equal instalments directly into the bank accounts of farmers holding up to 2 hectares of land. The scheme helped the Modi government win over the voters ahead of the general election.
The previous Modi government had promised to double farmers' income by 2022 by raising farm output and prices. It had raised minimum support price (MSP) of various crops including rice, wheat and pulses.