The cabinet also approved a new central sector scheme called the Pradhan Mantri Kisan Pension Yojana.

Highlights PM Modi's new cabinet met for the first time today evening

Extending annual payout to all farmers among important decisions taken

The cabinet also cleared pension scheme for traders

Prime Minister Narendra Modi's cabinet, in its first meeting of the new term on Friday evening, made big moves for farmers and traders.

The cabinet has decided to extend the PM-KISAN scheme - which promises poor farmers an annual payout of Rs 6,000 in three instalments - to all farmers. The new move will benefit around 15 crore farmers. The Cabinet has also cleared the pension scheme for traders. Three crore retail traders and shopkeepers will benefit from the scheme.

The revised scheme envisages 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 centre had announced the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme in the interim Budget 2019-20. Originally under this programme, Rs. 6,000 were to be paid to 12 crore small and marginal farmers holding cultivable land of up to two hectares per year in three instalments, through Direct Bank Transfer.

PM-KISAN while being announced in the budget in February , was introduced - unusually - as a retrospective scheme, starting from December 1, 2018, which the government could use to argue makes it an ongoing scheme. The first installment was handed over to farmers in February.

The cabinet today also approved a new central sector scheme called the Pradhan Mantri Kisan Pension Yojana which is a voluntary and contributory pension scheme for small and marginal farmers across the country.

"The central government will contribute to the pension fund in equal amount as contributed by the farmer," Union Minister of Agriculture and Farmer Welfare, Narendra Singh Tomar announced after the cabinet meeting.

"The scheme provides income support to small and marginal landholder farmer families with cultivable land holding up to 2 hectare, across the country, by way of Rs 6,000 per year. The ongoing scheme aims to cover around 12.5 crore SMF families," he added.

Today's decisions are 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 official data released today, 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.

With inputs from IANS