Farmer Income and Security: PM-KISAN, KCC, and Crop Insurance Framework

Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) was launched on February 24, 2019, and provides income support of ₹6,000 per year to all landholding farmer families, paid in three equal instalments of ₹2,000 each directly into bank accounts via DBT. The scheme covers husband, wife, and minor children owning cultivable land as identified through state/UT land records. Excluded categories include institutional landholders, income-tax payers, government officials, and high-income pensioners.

The Kisan Credit Card scheme, introduced in 1998–99 on the recommendation of the Nayak Committee, provides farmers with flexible, revolving credit for agricultural inputs, post-harvest expenses, and allied activities. The scheme is implemented through commercial banks, regional rural banks (RRBs), and cooperative banks. The Union Budget 2025–26 proposed raising the KCC limit from ₹3 lakh to ₹5 lakh to account for rising input costs; RBI has released draft guidelines to modernise and expand KCC scope.

Key Details

• Introduced: 1998–99 (Nayak Committee recommendation)
• Current limit (pre-revision): ₹3 lakh; proposed revised limit: ₹5 lakh
• Coverage: Short-term credit needs for crop cultivation, post-harvest, allied activities, and consumption
• Interest subvention: Government provides 2% subvention on KCC loans up to ₹3 lakh; additional 3% incentive for prompt repayment (effective rate: 4%)
• Expanded to fishermen and animal husbandry farmers in recent years

PMFBY, launched in 2016 replacing the National Agricultural Insurance Scheme, provides comprehensive crop insurance against yield losses due to non-preventable natural risks. The premium structure places a ceiling on farmer contribution — maximum 2% for kharif crops, 1.5% for rabi crops, and 5% for commercial/horticultural crops — with the balance shared between Centre and states. Actuarial-based premiums ensure scheme financial sustainability. The Restructured Weather Based Crop Insurance Scheme (RWBCIS) runs in parallel for weather-linked payouts.

DBT is a reform architecture introduced in 2013 that routes government scheme benefits directly into beneficiaries' Aadhaar-linked bank accounts, eliminating intermediaries and reducing leakage. The JAM trinity — Jan Dhan Yojana, Aadhaar, Mobile — provides the underlying infrastructure. PM-KISAN is one of the flagship DBT schemes and has become a model for direct income transfer globally.