State Farmer Incentives Over PM-KISAN: MSP Bonus vs DBT
Why in the news
Many states announced extra farmer support beyond the Centre’s PM-KISAN instalments, which raises the burden on state budgets and revives the debate on MSP versus direct transfers.
State-wise support
| State | Support announced |
|---|---|
| Madhya Pradesh | ₹4,000 per hectare for paddy growers (₹480 crore cost); wheat bonus ₹125 per quintal, making the price ₹2,600 per quintal |
| Rajasthan | PM-KISAN top-up to ₹9,000 a year; wheat bonus ₹150 per quintal |
| Chhattisgarh | Krishak Unnati Yojana (₹10,000 crore): subsidy of ₹19,257 per acre plus paddy bonus |
| Odisha | CM-KISAN (₹2,020 crore): ₹4,000 plus ₹6,000 of PM-KISAN; ₹12,500 for landless farmers; paddy bought at ₹3,100 per quintal against ₹2,300 MSP |
Concerns
- Fiscal strain on state budgets.
- Incentives favour wheat and paddy, discouraging pulses, oilseeds and horticulture.
- High MSP procurement creates surplus stocks and storage problems.
Policy options
- Three mechanisms debated: MSP procurement, Direct Benefit Transfer (DBT) and Deficiency Price Payment (DPP), which pays farmers when prices drop below MSP.
- C.S.C. Sekhar (Delhi University), using 2019-20 prices: MSP plus DPP would cost ₹2.65-3.4 lakh crore a year.
- He proposed yearly per-hectare support of ₹19,875-25,980; PM-KISAN’s ₹6,000 a year is far lower.
- If the Centre paid ₹10,000-12,500 per farm, the cost would be ₹1.44-1.89 lakh crore a year.
- DBT leaves out tenant farmers, as payment follows land ownership.
- Best mix: MSP for wheat and paddy (food security) and DBT for other crops.
Exam angle
- PM-KISAN annual amount: ₹6,000.
- Related terms: MSP, DBT, DPP, fiscal burden, tenant farmers.