Centre to save Rs 10,600 crore on PM-Kisan scheme this fiscal year

Unspent amount to help with fiscal situation

Of the Rs 20,000 crore that the Modi government allocated for its new flagship scheme PM Kisan for 2018-19, it is set to save around Rs 10,600 crore, as the Model Code of Conduct ahead of the Lok Sabha elections prevents the Centre from adding more beneficiaries to existing schemes.

The PM Kisan scheme, announced by Piyush Goyal in the 2019-20 interim Budget, promises a support of Rs 6,000 annually to small and marginal farmers.

As of date, the government has transferred Rs 2,000 each to the accounts of 27 million farmers in the first instalment of PM Kisan, a disbursement of Rs 5,400 crore. The Agriculture Ministry had written to the Election Commission in early March, seeking permission to add more beneficiaries. The EC responded saying that new beneficiaries to existing schemes could be added before March 10, but not after that.

The EC announced the election dates on March 10, with which the Model Code of Conduct came into place. 

An official involved in PM Kisan confirmed to Business Standard that the government registered 20 million more beneficiaries before the cut-off date of March 10. These 20 million farmers will be given Rs 2,000 each before the fiscal year ends on March 31, taking the total disbursement to Rs 9,400 crore.

All 47 million farmers registered will also be given a second instalment in April. New beneficiaries will only be added after the election results. For next year, the allocation for the scheme has been budgeted at Rs 75,000 crore.

The remaining Rs 10,600 crore this year will remain unspent, and will go some way in helping the government meet the challenging fiscal deficit target, officials said. “Anything that helps the fiscal situation, we will take it,” said an official, admitting that the Model Code of Conduct came as a “blessing in disguise”.

The official said apart from the 47 million already registered before March 10, the Centre could have added 40 million more farmers and disbursed money to them had the Model Code of Conduct not been in place.

For April-January 2018-19, the fiscal deficit touched around Rs 7.71 trillion, a staggering 121.5 per cent of the full year revised target of Rs 6.34 trillion. This means that the Centre will need to have fiscal surplus of Rs 1.36 trillion in the last two months of this year to meet the target. While officials do expect goods and service tax numbers to meet the lowered revised estimates, and the disinvestment collections have crossed the target by Rs 5,000 crore, direct tax numbers so far aren’t as encouraging.

Total direct tax collections, as of March 15, stand at a little over Rs 9 trillion, giving the taxman just two weeks to reach the 2018-19 revised direct tax estimates of Rs 12 trillion. Officials conceded it is an extremely difficult task to raise the remaining Rs 3 trillion in direct tax revenue before March 31.

Additionally, there is an admission that some adjustments have to be made on the expenditure side of things. As reported earlier, the government is compressing around Rs 60,000 crore worth of expenditure. This compression will include subsidy carryovers of as much as Rs 35,000 crore, ministries returning back unspent amounts, and capital expenditure cuts.

20 million beneficiaries by March-end 

• Rs 5,400 cr disbursed by the government to 27 million farmers 

• 20 million more farmers registered before Code of Conduct came into force 

• Rs 2,000 each to 20 million farmers before March 31 

• Rs 9,400 cr spent on PM Kisan this fiscal year against allocation of Rs 20,000 cr

• Amount saved will help the government meet fiscal deficit target, officials say