🪜Income Support & Welfare Schemes for Farmers
Complete guide to PM-KISAN, PM-KMDY, PM-AASHA, PM KUSUM, Kisan Vikas Patra, and SMAM -- with agricultural examples, comparisons, and exam tips.
Why Income Support Matters
A marginal rice farmer in Odisha earns Rs 40,000 from his 0.5 hectare Kharif crop. After deducting input costs of Rs 25,000, his net income is just Rs 15,000 for six months. During the Rabi season, he has no irrigation and no income. Income support schemes bridge this gap by providing guaranteed cash transfers, pensions, fair prices, clean energy, savings instruments, and mechanization support — ensuring farmers can sustain their families year-round.
PM-KISAN (Pradhan Mantri Kisan Samman Nidhi)
One of the largest direct income support schemes in the world. It provides guaranteed cash transfers to every eligible farmer household regardless of crop output or market conditions.
[!IMPORTANT] PM-KISAN: Income support of Rs 6,000/year in 3 instalments of Rs 2,000 each. Effective from 1.12.2018. Now covers all farmers irrespective of land holding. It is a Central Sector scheme with 100% Central funding.
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Kisan Samman Nidhi |
| Scheme type | Central Sector (100% funded by Centre) |
| Effective from | 1 December 2018 |
| Income support | Rs 6,000 per year |
| Instalments | 3 instalments of Rs 2,000 each (Apr-Jul, Aug-Nov, Dec-Mar) |
| Original eligibility | Small and marginal farmers (up to 2 hectares) |
| Revised eligibility | All land-owning farmers irrespective of land holding |
| Transfer mode | Direct Benefit Transfer (DBT) to bank accounts |
| Nodal ministry | Department of Agriculture, Cooperation & Farmers Welfare |
| Family definition | Husband, wife, and minor children |
| Beneficiary identification | Responsibility of State/UT Governments |
| Budget 2025-26 |
Agricultural example: A wheat farmer in UP with 3 hectares receives Rs 2,000 directly in his bank account every four months. Over the year, he gets Rs 6,000 — enough to buy 2 bags of DAP fertilizer for his next crop.
Who is Excluded?
- Institutional landholders
- Former and current holders of constitutional posts
- Serving or retired government officers and employees
- Income tax payers
- Professionals (doctors, engineers, lawyers, chartered accountants)
Beneficiary Statistics (as of December 2019)
| State | Beneficiaries |
|---|---|
| Uttar Pradesh | 1.97 crore (highest — largest agricultural population) |
| Maharashtra | 81 lakh |
| Rajasthan | 56 lakh |
| West Bengal | 0 (state refused to share data; runs own Krishak Bandhu scheme) |
| Lakshadweep | 0 |
| Total | 8.62 crore |
Revised scheme expected to cover ~14.5 crore beneficiaries with estimated Central expenditure of Rs 87,217.50 crore (2019-20).
PM-KISAN and KCC Convergence
The Government launched a drive to ensure all PM-KISAN beneficiaries also get KCC:
- All KCC charges (processing, documentation, inspection, ledger folio, service charges) waived for loans up to Rs 3 lakh by Indian Banks’ Association (IBA)
- Banks must issue KCC within 14 days (2 weeks) of receiving a completed application
- PM-KISAN beneficiaries can approach their PM-KISAN account bank branch for KCC
Agricultural example: A sugarcane farmer in Karnataka who already receives PM-KISAN can walk into the same bank and get a KCC within 2 weeks with zero charges — combining income support with cheap credit.
[!TIP] Exam mnemonic — PM-KISAN “6-3-2”: Rs 6,000/year, 3 instalments, Rs 2,000 each.
Comparison with State Income Support Schemes
PM-KMDY (Pradhan Mantri Kisan Maan-Dhan Yojana)
Addresses the critical issue of old-age security for farmers. Unlike salaried workers with pension benefits, most farmers have no retirement income.
[!NOTE] PM-KMDY: Monthly pension of Rs 3,000 at age 60. Entry age: 18-40 years. Monthly contribution: Rs 55 to Rs 200 (matched equally by Government). Pension Fund Manager: LIC.
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Kisan Maan-Dhan Yojana |
| Type | Voluntary and contributory pension scheme |
| Effective from | 9 August 2019 |
| Eligibility | Small and Marginal Farmers (land up to 2 hectares) |
| Entry age | 18 to 40 years |
| Monthly pension | Rs 3,000 on attaining age 60 |
| Monthly contribution | Rs 55 (entry at age 18) to Rs 200 (entry at age 40) |
| Government matching | Equal to farmer’s contribution |
| Pension Fund Manager | LIC (Life Insurance Corporation of India) |
| Spouse eligibility | Separate pension of Rs 3,000 on making separate contributions |
Agricultural example: A 25-year-old paddy farmer in Assam joins PM-KMDY by contributing Rs 80/month. The Government matches it with Rs 80. At age 60, he receives Rs 3,000 every month for life. If his wife also enrolled, the couple gets Rs 6,000/month together.
Key Provisions
| Scenario | What Happens |
|---|---|
| Farmer dies before age 60 | Spouse can continue contributions; or receive total contribution + interest |
| Farmer dies after age 60 | Spouse receives 50% of pension as family pension |
| Both farmer and spouse die | Accumulated corpus returns to Pension Fund |
| Voluntary exit (after 5 years) | Entire contribution returned with savings bank interest rate |
| Default in contributions | Can regularize by paying outstanding dues + prescribed interest. No late fee for 1 month; 3 payment cycles without interest |
| PM-KISAN linkage | Farmer can auto-debit contribution from PM-KISAN instalments |
[!TIP] Exam mnemonic — PM-KMDY “3-60-55-200”: Rs 3,000 pension at age 60; contribution ranges from Rs 55 to Rs 200 per month.
PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan)
Ensures farmers receive fair prices for their produce. While MSP is announced for many crops, effective procurement at MSP was historically limited to wheat and rice in a few states. PM-AASHA fills this gap.
[!IMPORTANT] PM-AASHA (approved September 2018) has 3 sub-schemes: PSS (physical procurement by NAFED), PDPS (bank transfer of price difference for oilseeds), and PPPS (private sector procurement pilot).
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Annadata Aay Sanrakshan Abhiyan |
| Approved | September 2018 |
| Aim | Ensuring remunerative prices (covering cost of production + reasonable profit) |
| MSP formula | 1.5 times the all-India weighted average Cost of Production (recommended by Swaminathan Commission) |
Three Sub-Schemes Compared
| Feature | PSS (Price Support) | PDPS (Price Deficiency Payment) | PPPS (Private Procurement Pilot) |
|---|---|---|---|
| Mechanism | Physical procurement at MSP | Cash transfer of MSP-market price difference | Private agencies procure at MSP |
| Crops | Pulses, oilseeds, copra | Oilseeds only | Selected crops |
| Implementing agency | NAFED (Central Nodal Agency) | Direct bank transfer | Selected private agencies |
| Government liability | Procurement expenditure + losses up to 25% of production | Difference between MSP and market price | Losses up to 15% of MSP |
| Physical procurement? | Yes | No | Yes (by private sector) |
Agricultural examples:
- PSS: Tur dal price in Latur (Maharashtra) falls to Rs 4,500/quintal against MSP of Rs 6,000. NAFED steps in and buys at Rs 6,000.
- PDPS: Soybean sells at Rs 3,200/quintal in the mandi against MSP of Rs 3,880. The farmer receives Rs 680/quintal directly in his bank account.
- PPPS: A private company is authorized to procure mustard at MSP in selected districts of Rajasthan, with Government compensating any losses.
[!TIP] Exam mnemonic — PM-AASHA “PPP”: PSS (Physical procurement), PDPS (Price difference payment), PPPS (Private procurement pilot).
PM KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan)
Tackles the dual challenge of energy security and water security for farmers by promoting solar energy in agriculture.
| Feature | Detail |
|---|---|
| Full name | Kisan Urja Suraksha evam Utthaan Mahabhiyan |
| Launched by | Ministry of New and Renewable Energy (MNRE) |
| Objective | Financial and water security for farmers |
| Target solar capacity | 25,750 MW by 2022 |
| Beneficiaries | 20 lakh farmers (standalone solar pumps) + 15 lakh farmers (grid-connected) |
Three Components Compared
| Feature | Component A | Component B | Component C |
|---|---|---|---|
| What | Ground-mounted solar power plants | Standalone solar pumps | Solarisation of grid-connected pumps |
| Capacity | 500 kW to 2 MW per project | Up to 7.5 HP per pump | Solar PV up to 2x pump capacity |
| Who sets up | Farmers, FPOs, cooperatives, panchayats | Individual farmers | Individual farmers |
| Revenue | Sell power to DISCOMs at Feed-in-Tariff | Save on diesel/electricity | Use solar for irrigation + sell surplus to DISCOM |
| Land | Barren/fallow land | — | — |
| General states subsidy | — | 60% (30% Centre + 30% State) | 60% (30% Centre + 30% State) |
| Special states subsidy | — | 80% (50% Centre + 30% State) | 80% (50% Centre + 30% State) |
| Farmer’s share (general) | — | 40% (can get bank loan for 30%) | 40% (can get bank loan for 30%) |
| Farmer’s share (special) | — | 20% (can get bank loan for 10%) | 20% (can get bank loan for 10%) |
Special category states: North-Eastern States, Sikkim, J&K, Himachal Pradesh, Uttarakhand, Lakshadweep, A&N Islands.
Agricultural examples:
- Component A: A farmer cooperative in Rajasthan installs a 1 MW solar plant on 5 acres of barren rocky land. The DISCOM buys power at the Feed-in-Tariff, earning the cooperative Rs 5-6 lakh/year.
- Component B: A vegetable farmer in Bihar replaces his diesel pump with a 5 HP solar pump. He saves Rs 30,000/year on diesel and irrigates whenever needed — free of cost.
- Component C: A sugarcane farmer in Maharashtra with a grid-connected 7.5 HP pump installs 15 kW solar panels (2x capacity). He uses solar power for irrigation and sells surplus electricity, earning Rs 15,000-20,000/year.
[!TIP] DISCOM = Distribution Company (distributes electricity to consumers). Feed-in-Tariff (FiT) = guaranteed price at which DISCOM buys solar power. FPO = Farmer Producer Organisation.
Kisan Vikas Patra (KVP)
A savings instrument (not a credit or subsidy scheme) that encourages long-term saving among rural populations through a simple, guaranteed-return investment available at post offices.
[!TIP] KVP Key Facts: Amount doubles in 124 months (10 years 4 months). Interest rate: 6.9%. Lock-in period: 30 months. First launched: 1988 by India Post. Re-launched: 2014. No Section 80C tax benefit.
| Feature | Detail |
|---|---|
| First launched | 1988 by India Post |
| Discontinued | 2011 (Shyamala Gopinath Committee flagged money laundering risk) |
| Re-launched | 2014 |
| Denominations | Rs 1,000, Rs 5,000, Rs 10,000, Rs 50,000 |
| Minimum investment | Rs 1,000 |
| Maximum investment | No upper limit |
| Interest rate | 6.9% (as of April 2020 - March 2021) |
| Doubling period | 124 months (10 years 4 months) |
| Lock-in (maturity) period | 30 months (2 years 6 months) |
| Tax benefit under Sec 80C | No |
| TDS on maturity | Exempt |
| Premature encashment | Not permitted (only on death, forfeiture by pledge, or court order) |
Who can purchase:
- An adult (in own name or on behalf of a minor)
- A Trust
- Two adults jointly
Important distinction: The lock-in period (30 months) is when premature withdrawal is first allowed, while the doubling period (124 months) is when the investment doubles in value. These are different concepts often confused in exams.
Agricultural example: A dairy farmer in Gujarat invests Rs 50,000 from the sale of her buffaloes in KVP. After 10 years and 4 months, she receives Rs 1,00,000 — a reliable nest egg for retirement, requiring no financial expertise.
[!TIP] Exam mnemonic — KVP “1-30-124”: Min Rs 1,000; lock-in 30 months; doubles in 124 months.
SMAM (Sub-Mission on Agricultural Mechanization)
Addresses one of the biggest constraints on Indian productivity: low farm mechanization. While developed countries have 4-6 kW/ha of farm power, India’s average is much lower.
| Feature | Detail |
|---|---|
| Launched | 2014 (revised 2016-17) |
| Plan period | 12th Five-Year Plan |
| Target farm power | 2 kW/ha (minimum threshold for efficient mechanized farming) |
| Implemented in | All states |
Fund Sharing Pattern
| Category | Centre : State |
|---|---|
| General states | 60 : 40 |
| North-Eastern & Himalayan states | 90 : 10 |
Agricultural example: A small farmer in Telangana wants a power tiller costing Rs 1,50,000. Under SMAM, she receives a subsidy covering a significant portion of the cost. The power tiller helps her prepare 5 hectares in 3 days instead of 15 days with bullocks — enabling timely sowing and better yields.
Why 2 kW/ha matters: Higher mechanization leads to:
- Timely sowing and harvesting (critical for yield)
- Reduced drudgery (especially for women farmers)
- Lower crop losses during harvesting
- Improved overall productivity
Major Scheme Launch Dates
| Scheme | Launch/Announcement Date |
|---|---|
| October 2007 | |
| 1 April 2014 | |
| 2014-15 | |
| 2014-15 | |
| 19 February 2015 | |
| 14 April 2016 | |
| Kharif 2016 | |
| Budget 2018-19 | |
| 24 February 2019 | |
| 8 March 2019 | |
| 9 August 2019 | |
| 29 February 2020 | |
| 15 May 2020 | |
| 10 September 2020 | |
| August 2022 | |
| Budget 2025-26 |
[!TIP] Exam Tip: Group by year: 2014-15 cluster (MIDH, NLM, NMSA, SHC) and 2018-19 cluster (Operation Greens, PM-KISAN, PM KUSUM) are frequently tested.
Budget Outlay: Key Agriculture Schemes (2024-25 vs 2025-26)
| Scheme / Head | Budget 2024-25 (Rs Crore) | Budget 2025-26 (Rs Crore) |
|---|---|---|
| 1,09,300 | 1,18,900 | |
| 86,000 | 86,000 | |
| 60,000 | 63,500 | |
| 23,000 | 24,000 | |
| 16,000 | 17,500 | |
| 14,600 | 15,000 | |
| 1,996 | 2,500 | |
| 2,200 | 2,500 | |
| 2,200 | 2,500 | |
| 2,025 | 2,500 | |
| 1,200 | 1,500 | |
| 750 | 1,300 | |
| — | 1,250 | |
| 800 | 1,000 | |
| 600 | 900 | |
| 450 | 800 | |
| 600 | 750 | |
| ~1,22,000 |
[!TIP] Top 5 by allocation: Urea Subsidy > MGNREGS > PM-KISAN > MISS > NBS. These five cover over 80% of agriculture-related budget.
Summary Table — Key Facts for Exams
| Scheme | Key Fact | Exam Tag |
|---|---|---|
| PM-KISAN | Rs 6,000/year in 3 instalments of Rs 2,000; all farmers; Central Sector scheme | AFO 2021 |
| PM-KISAN effective from | 1 December 2018 | — |
| PM-KISAN beneficiaries (target) | ~14.5 crore | — |
| PM-KISAN installments released | 20 | — |
| PM-KISAN eKYC | AADHAAR mandatory since 2023 | — |
| PM-KISAN budget 2025-26 | Rs 63,500 crore | — |
| KCC issuance for PM-KISAN | Within 14 days; all charges waived up to Rs 3 lakh | — |
| PM-KMDY | Rs 3,000/month pension at age 60; contribution Rs 55-200/month | — |
| PM-KMDY effective from | 9 August 2019 | — |
| PM-KMDY fund manager | LIC | — |
| PM-KMDY spouse pension | Separate Rs 3,000/month (total Rs 6,000 for couple) | — |
| PM-KMDY family pension | 50% of pension for surviving spouse | — |
| PM-KMDY enrolled | 24.88 lakh farmers | — |
| PM-AASHA approved | September 2018; Budget 2026-27: Rs 7,200 crore | — |
| PM-AASHA sub-schemes | PSS, PDPS, PPPS | — |
| PDPS applicable to | Oilseeds only | — |
| PSS implementing agency | NAFED | — |
| MSP formula | 1.5 times Cost of Production (Swaminathan Commission) | — |
| PM KUSUM target | 25,750 MW solar capacity | — |
| PM KUSUM Component B | Solar pumps up to 7.5 HP; 60% subsidy (general), 80% (special states) | — |
| KVP launched/re-launched | 1988 / 2014 | RRB-SO & AFO 2021 |
| KVP interest rate | 6.9% | RRB-SO & AFO 2021 |
| KVP doubling period | 124 months | — |
| KVP lock-in | 30 months | — |
| SMAM launched | 2014 | — |
| SMAM target | 2 kW/ha farm power | — |
| SMAM fund share | 60:40 (general); 90:10 (NE & Himalayan) | — |
Pro Content Locked
Upgrade to Pro to access this lesson and all other premium content.
₹2388 billed yearly
- All Agriculture & Banking Courses
- AI Lesson Questions (100/day)
- AI Doubt Solver (50/day)
- Glows & Grows Feedback (30/day)
- AI Section Quiz (20/day)
- 22-Language Translation (30/day)
- Recall Questions (20/day)
- AI Quiz (15/day)
- AI Quiz Paper Analysis
- AI Step-by-Step Explanations
- Spaced Repetition Recall (FSRS)
- AI Tutor
- Immersive Text Questions
- Audio Lessons — Hindi & English
- Mock Tests & Previous Year Papers
- Summary & Mind Maps
- XP, Levels, Leaderboard & Badges
- Generate New Classrooms
- Voice AI Teacher (AgriDots Live)
- AI Revision Assistant
- Knowledge Gap Analysis
- Interactive Revision (LangGraph)
🔒 Secure via Razorpay · Cancel anytime · No hidden fees
Why Income Support Matters
A marginal rice farmer in Odisha earns Rs 40,000 from his 0.5 hectare Kharif crop. After deducting input costs of Rs 25,000, his net income is just Rs 15,000 for six months. During the Rabi season, he has no irrigation and no income. Income support schemes bridge this gap by providing guaranteed cash transfers, pensions, fair prices, clean energy, savings instruments, and mechanization support — ensuring farmers can sustain their families year-round.
PM-KISAN (Pradhan Mantri Kisan Samman Nidhi)
One of the largest direct income support schemes in the world. It provides guaranteed cash transfers to every eligible farmer household regardless of crop output or market conditions.
[!IMPORTANT] PM-KISAN: Income support of Rs 6,000/year in 3 instalments of Rs 2,000 each. Effective from 1.12.2018. Now covers all farmers irrespective of land holding. It is a Central Sector scheme with 100% Central funding.
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Kisan Samman Nidhi |
| Scheme type | Central Sector (100% funded by Centre) |
| Effective from | 1 December 2018 |
| Income support | Rs 6,000 per year |
| Instalments | 3 instalments of Rs 2,000 each (Apr-Jul, Aug-Nov, Dec-Mar) |
| Original eligibility | Small and marginal farmers (up to 2 hectares) |
| Revised eligibility | All land-owning farmers irrespective of land holding |
| Transfer mode | Direct Benefit Transfer (DBT) to bank accounts |
| Nodal ministry | Department of Agriculture, Cooperation & Farmers Welfare |
| Family definition | Husband, wife, and minor children |
| Beneficiary identification | Responsibility of State/UT Governments |
| Budget 2025-26 |
Agricultural example: A wheat farmer in UP with 3 hectares receives Rs 2,000 directly in his bank account every four months. Over the year, he gets Rs 6,000 — enough to buy 2 bags of DAP fertilizer for his next crop.
Who is Excluded?
- Institutional landholders
- Former and current holders of constitutional posts
- Serving or retired government officers and employees
- Income tax payers
- Professionals (doctors, engineers, lawyers, chartered accountants)
Beneficiary Statistics (as of December 2019)
| State | Beneficiaries |
|---|---|
| Uttar Pradesh | 1.97 crore (highest — largest agricultural population) |
| Maharashtra | 81 lakh |
| Rajasthan | 56 lakh |
| West Bengal | 0 (state refused to share data; runs own Krishak Bandhu scheme) |
| Lakshadweep | 0 |
| Total | 8.62 crore |
Revised scheme expected to cover ~14.5 crore beneficiaries with estimated Central expenditure of Rs 87,217.50 crore (2019-20).
PM-KISAN and KCC Convergence
The Government launched a drive to ensure all PM-KISAN beneficiaries also get KCC:
- All KCC charges (processing, documentation, inspection, ledger folio, service charges) waived for loans up to Rs 3 lakh by Indian Banks’ Association (IBA)
- Banks must issue KCC within 14 days (2 weeks) of receiving a completed application
- PM-KISAN beneficiaries can approach their PM-KISAN account bank branch for KCC
Agricultural example: A sugarcane farmer in Karnataka who already receives PM-KISAN can walk into the same bank and get a KCC within 2 weeks with zero charges — combining income support with cheap credit.
[!TIP] Exam mnemonic — PM-KISAN “6-3-2”: Rs 6,000/year, 3 instalments, Rs 2,000 each.
Comparison with State Income Support Schemes
PM-KMDY (Pradhan Mantri Kisan Maan-Dhan Yojana)
Addresses the critical issue of old-age security for farmers. Unlike salaried workers with pension benefits, most farmers have no retirement income.
[!NOTE] PM-KMDY: Monthly pension of Rs 3,000 at age 60. Entry age: 18-40 years. Monthly contribution: Rs 55 to Rs 200 (matched equally by Government). Pension Fund Manager: LIC.
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Kisan Maan-Dhan Yojana |
| Type | Voluntary and contributory pension scheme |
| Effective from | 9 August 2019 |
| Eligibility | Small and Marginal Farmers (land up to 2 hectares) |
| Entry age | 18 to 40 years |
| Monthly pension | Rs 3,000 on attaining age 60 |
| Monthly contribution | Rs 55 (entry at age 18) to Rs 200 (entry at age 40) |
| Government matching | Equal to farmer’s contribution |
| Pension Fund Manager | LIC (Life Insurance Corporation of India) |
| Spouse eligibility | Separate pension of Rs 3,000 on making separate contributions |
Agricultural example: A 25-year-old paddy farmer in Assam joins PM-KMDY by contributing Rs 80/month. The Government matches it with Rs 80. At age 60, he receives Rs 3,000 every month for life. If his wife also enrolled, the couple gets Rs 6,000/month together.
Key Provisions
| Scenario | What Happens |
|---|---|
| Farmer dies before age 60 | Spouse can continue contributions; or receive total contribution + interest |
| Farmer dies after age 60 | Spouse receives 50% of pension as family pension |
| Both farmer and spouse die | Accumulated corpus returns to Pension Fund |
| Voluntary exit (after 5 years) | Entire contribution returned with savings bank interest rate |
| Default in contributions | Can regularize by paying outstanding dues + prescribed interest. No late fee for 1 month; 3 payment cycles without interest |
| PM-KISAN linkage | Farmer can auto-debit contribution from PM-KISAN instalments |
[!TIP] Exam mnemonic — PM-KMDY “3-60-55-200”: Rs 3,000 pension at age 60; contribution ranges from Rs 55 to Rs 200 per month.
PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan)
Ensures farmers receive fair prices for their produce. While MSP is announced for many crops, effective procurement at MSP was historically limited to wheat and rice in a few states. PM-AASHA fills this gap.
[!IMPORTANT] PM-AASHA (approved September 2018) has 3 sub-schemes: PSS (physical procurement by NAFED), PDPS (bank transfer of price difference for oilseeds), and PPPS (private sector procurement pilot).
| Feature | Detail |
|---|---|
| Full name | Pradhan Mantri Annadata Aay Sanrakshan Abhiyan |
| Approved | September 2018 |
| Aim | Ensuring remunerative prices (covering cost of production + reasonable profit) |
| MSP formula | 1.5 times the all-India weighted average Cost of Production (recommended by Swaminathan Commission) |
Three Sub-Schemes Compared
| Feature | PSS (Price Support) | PDPS (Price Deficiency Payment) | PPPS (Private Procurement Pilot) |
|---|---|---|---|
| Mechanism | Physical procurement at MSP | Cash transfer of MSP-market price difference | Private agencies procure at MSP |
| Crops | Pulses, oilseeds, copra | Oilseeds only | Selected crops |
| Implementing agency | NAFED (Central Nodal Agency) | Direct bank transfer | Selected private agencies |
| Government liability | Procurement expenditure + losses up to 25% of production | Difference between MSP and market price | Losses up to 15% of MSP |
| Physical procurement? | Yes | No | Yes (by private sector) |
Agricultural examples:
- PSS: Tur dal price in Latur (Maharashtra) falls to Rs 4,500/quintal against MSP of Rs 6,000. NAFED steps in and buys at Rs 6,000.
- PDPS: Soybean sells at Rs 3,200/quintal in the mandi against MSP of Rs 3,880. The farmer receives Rs 680/quintal directly in his bank account.
- PPPS: A private company is authorized to procure mustard at MSP in selected districts of Rajasthan, with Government compensating any losses.
[!TIP] Exam mnemonic — PM-AASHA “PPP”: PSS (Physical procurement), PDPS (Price difference payment), PPPS (Private procurement pilot).
PM KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan)
Tackles the dual challenge of energy security and water security for farmers by promoting solar energy in agriculture.
| Feature | Detail |
|---|---|
| Full name | Kisan Urja Suraksha evam Utthaan Mahabhiyan |
| Launched by | Ministry of New and Renewable Energy (MNRE) |
| Objective | Financial and water security for farmers |
| Target solar capacity | 25,750 MW by 2022 |
| Beneficiaries | 20 lakh farmers (standalone solar pumps) + 15 lakh farmers (grid-connected) |
Three Components Compared
| Feature | Component A | Component B | Component C |
|---|---|---|---|
| What | Ground-mounted solar power plants | Standalone solar pumps | Solarisation of grid-connected pumps |
| Capacity | 500 kW to 2 MW per project | Up to 7.5 HP per pump | Solar PV up to 2x pump capacity |
| Who sets up | Farmers, FPOs, cooperatives, panchayats | Individual farmers | Individual farmers |
| Revenue | Sell power to DISCOMs at Feed-in-Tariff | Save on diesel/electricity | Use solar for irrigation + sell surplus to DISCOM |
| Land | Barren/fallow land | — | — |
| General states subsidy | — | 60% (30% Centre + 30% State) | 60% (30% Centre + 30% State) |
| Special states subsidy | — | 80% (50% Centre + 30% State) | 80% (50% Centre + 30% State) |
| Farmer’s share (general) | — | 40% (can get bank loan for 30%) | 40% (can get bank loan for 30%) |
| Farmer’s share (special) | — | 20% (can get bank loan for 10%) | 20% (can get bank loan for 10%) |
Special category states: North-Eastern States, Sikkim, J&K, Himachal Pradesh, Uttarakhand, Lakshadweep, A&N Islands.
Agricultural examples:
- Component A: A farmer cooperative in Rajasthan installs a 1 MW solar plant on 5 acres of barren rocky land. The DISCOM buys power at the Feed-in-Tariff, earning the cooperative Rs 5-6 lakh/year.
- Component B: A vegetable farmer in Bihar replaces his diesel pump with a 5 HP solar pump. He saves Rs 30,000/year on diesel and irrigates whenever needed — free of cost.
- Component C: A sugarcane farmer in Maharashtra with a grid-connected 7.5 HP pump installs 15 kW solar panels (2x capacity). He uses solar power for irrigation and sells surplus electricity, earning Rs 15,000-20,000/year.
[!TIP] DISCOM = Distribution Company (distributes electricity to consumers). Feed-in-Tariff (FiT) = guaranteed price at which DISCOM buys solar power. FPO = Farmer Producer Organisation.
Kisan Vikas Patra (KVP)
A savings instrument (not a credit or subsidy scheme) that encourages long-term saving among rural populations through a simple, guaranteed-return investment available at post offices.
[!TIP] KVP Key Facts: Amount doubles in 124 months (10 years 4 months). Interest rate: 6.9%. Lock-in period: 30 months. First launched: 1988 by India Post. Re-launched: 2014. No Section 80C tax benefit.
| Feature | Detail |
|---|---|
| First launched | 1988 by India Post |
| Discontinued | 2011 (Shyamala Gopinath Committee flagged money laundering risk) |
| Re-launched | 2014 |
| Denominations | Rs 1,000, Rs 5,000, Rs 10,000, Rs 50,000 |
| Minimum investment | Rs 1,000 |
| Maximum investment | No upper limit |
| Interest rate | 6.9% (as of April 2020 - March 2021) |
| Doubling period | 124 months (10 years 4 months) |
| Lock-in (maturity) period | 30 months (2 years 6 months) |
| Tax benefit under Sec 80C | No |
| TDS on maturity | Exempt |
| Premature encashment | Not permitted (only on death, forfeiture by pledge, or court order) |
Who can purchase:
- An adult (in own name or on behalf of a minor)
- A Trust
- Two adults jointly
Important distinction: The lock-in period (30 months) is when premature withdrawal is first allowed, while the doubling period (124 months) is when the investment doubles in value. These are different concepts often confused in exams.
Agricultural example: A dairy farmer in Gujarat invests Rs 50,000 from the sale of her buffaloes in KVP. After 10 years and 4 months, she receives Rs 1,00,000 — a reliable nest egg for retirement, requiring no financial expertise.
[!TIP] Exam mnemonic — KVP “1-30-124”: Min Rs 1,000; lock-in 30 months; doubles in 124 months.
SMAM (Sub-Mission on Agricultural Mechanization)
Addresses one of the biggest constraints on Indian productivity: low farm mechanization. While developed countries have 4-6 kW/ha of farm power, India’s average is much lower.
| Feature | Detail |
|---|---|
| Launched | 2014 (revised 2016-17) |
| Plan period | 12th Five-Year Plan |
| Target farm power | 2 kW/ha (minimum threshold for efficient mechanized farming) |
| Implemented in | All states |
Fund Sharing Pattern
| Category | Centre : State |
|---|---|
| General states | 60 : 40 |
| North-Eastern & Himalayan states | 90 : 10 |
Agricultural example: A small farmer in Telangana wants a power tiller costing Rs 1,50,000. Under SMAM, she receives a subsidy covering a significant portion of the cost. The power tiller helps her prepare 5 hectares in 3 days instead of 15 days with bullocks — enabling timely sowing and better yields.
Why 2 kW/ha matters: Higher mechanization leads to:
- Timely sowing and harvesting (critical for yield)
- Reduced drudgery (especially for women farmers)
- Lower crop losses during harvesting
- Improved overall productivity
Major Scheme Launch Dates
| Scheme | Launch/Announcement Date |
|---|---|
| October 2007 | |
| 1 April 2014 | |
| 2014-15 | |
| 2014-15 | |
| 19 February 2015 | |
| 14 April 2016 | |
| Kharif 2016 | |
| Budget 2018-19 | |
| 24 February 2019 | |
| 8 March 2019 | |
| 9 August 2019 | |
| 29 February 2020 | |
| 15 May 2020 | |
| 10 September 2020 | |
| August 2022 | |
| Budget 2025-26 |
[!TIP] Exam Tip: Group by year: 2014-15 cluster (MIDH, NLM, NMSA, SHC) and 2018-19 cluster (Operation Greens, PM-KISAN, PM KUSUM) are frequently tested.
Budget Outlay: Key Agriculture Schemes (2024-25 vs 2025-26)
| Scheme / Head | Budget 2024-25 (Rs Crore) | Budget 2025-26 (Rs Crore) |
|---|---|---|
| 1,09,300 | 1,18,900 | |
| 86,000 | 86,000 | |
| 60,000 | 63,500 | |
| 23,000 | 24,000 | |
| 16,000 | 17,500 | |
| 14,600 | 15,000 | |
| 1,996 | 2,500 | |
| 2,200 | 2,500 | |
| 2,200 | 2,500 | |
| 2,025 | 2,500 | |
| 1,200 | 1,500 | |
| 750 | 1,300 | |
| — | 1,250 | |
| 800 | 1,000 | |
| 600 | 900 | |
| 450 | 800 | |
| 600 | 750 | |
| ~1,22,000 |
[!TIP] Top 5 by allocation: Urea Subsidy > MGNREGS > PM-KISAN > MISS > NBS. These five cover over 80% of agriculture-related budget.
Summary Table — Key Facts for Exams
| Scheme | Key Fact | Exam Tag |
|---|---|---|
| PM-KISAN | Rs 6,000/year in 3 instalments of Rs 2,000; all farmers; Central Sector scheme | AFO 2021 |
| PM-KISAN effective from | 1 December 2018 | — |
| PM-KISAN beneficiaries (target) | ~14.5 crore | — |
| PM-KISAN installments released | 20 | — |
| PM-KISAN eKYC | AADHAAR mandatory since 2023 | — |
| PM-KISAN budget 2025-26 | Rs 63,500 crore | — |
| KCC issuance for PM-KISAN | Within 14 days; all charges waived up to Rs 3 lakh | — |
| PM-KMDY | Rs 3,000/month pension at age 60; contribution Rs 55-200/month | — |
| PM-KMDY effective from | 9 August 2019 | — |
| PM-KMDY fund manager | LIC | — |
| PM-KMDY spouse pension | Separate Rs 3,000/month (total Rs 6,000 for couple) | — |
| PM-KMDY family pension | 50% of pension for surviving spouse | — |
| PM-KMDY enrolled | 24.88 lakh farmers | — |
| PM-AASHA approved | September 2018; Budget 2026-27: Rs 7,200 crore | — |
| PM-AASHA sub-schemes | PSS, PDPS, PPPS | — |
| PDPS applicable to | Oilseeds only | — |
| PSS implementing agency | NAFED | — |
| MSP formula | 1.5 times Cost of Production (Swaminathan Commission) | — |
| PM KUSUM target | 25,750 MW solar capacity | — |
| PM KUSUM Component B | Solar pumps up to 7.5 HP; 60% subsidy (general), 80% (special states) | — |
| KVP launched/re-launched | 1988 / 2014 | RRB-SO & AFO 2021 |
| KVP interest rate | 6.9% | RRB-SO & AFO 2021 |
| KVP doubling period | 124 months | — |
| KVP lock-in | 30 months | — |
| SMAM launched | 2014 | — |
| SMAM target | 2 kW/ha farm power | — |
| SMAM fund share | 60:40 (general); 90:10 (NE & Himalayan) | — |
Knowledge Check
Take a dynamically generated quiz based on the material you just read to test your understanding and get personalized feedback.
Lesson Doubts
Ask questions, get expert answers