india

Updated: Aug 09, 2019 23:57 IST

The Modi government on Friday launched the Pradhan Mantri Kisan Maan Dhan Yojana, a pension scheme for small farmers of the country.

The social-security programme is aimed at 120 million cultivators categorised as “small and marginal” because they mostly own less than two hectares of land.

Under the scheme, eligible farmers between 18 and 40 years of age can register themselves for the pension scheme by visiting the nearest common service centre, digital facilities spread across states where beneficiaries can enrol for a clutch of welfare programmes known as centrally sponsored schemes. Once enrolled they will start paying a monthly premium.

On completion of 20 years, a farmer will be eligible for a monthly pension of ₹3000. Participation will be voluntary.

In contrast, industrial workers in the country, who are enrolled under the Employees’ Provident Fund Organisation, qualify for a minimum monthly pension of ₹1000 depending on their category and contribution. Participation for qualifying industrial workers is compulsory. The government has announced plans to raise it to a minimum of ₹3,000 a month for the informal sector workers through the Pradhan Mantri Shram Yogi Maan Dhan scheme.

“Farmers often don’t have sufficient savings, especially poor cultivators. This scheme is aimed at providing a measure of social security,” farm minister Narendra Singh Tomar told reporters, launching the scheme.

Tomar said the pension fund, to be managed by the Life Insurance Corporation of India, was part of his ministry’s agenda for the government’s first 100 days in power.

As with any insurance or pension product, monthly premiums will depend on the age of an enrolling farmer. The central government, a co-contributor under the scheme, will pay half of the premium.

For instance, a farmer who opts for the scheme at 18 years, the entry-level age, will have to pay a monthly premium of ₹55, with an equal share coming from the central government. A farmer aged 40 pays ₹200.

In case a farmer enrolled for the pension scheme dies before superannuation of the scheme or before attaining the age of 60, the spouse may continue paying the remaining premiums. In case the spouse wants to exit the scheme, a value equal to total premiums along with interest is payable to the nominee.

Spouses of farmers who die after the completing the scheme superannuation are eligible for half the monthly pension amount or ₹1500.

Farmers who receive ₹6000 as part of the PM-KISAN scheme, an income transfer programme started by the Modi government in its previous tenure, can opt to get his or her premiums deducted from this amount.

“It’s a welcome step. However, since it is voluntary, it remains to be seen whether it will attract large numbers of farmers. Along with other pension products, like Atal Pension Yojana, it will increase the ambit of the country’s social security coverage,” said S Mani, an economist at the Tamil Nadu Agricultural University.