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Since winning the 2014 election, the NDA introduced several schemes to address various issues faced by farmers and the rural poor such as financial inclusion, micro-finance, crop insurance, rural electrification, area under irrigation, soil health, and rural employment. Many of the NDA’s schemes are a rehash of ones introduced by the UPA government, but some are seeing better implementation in their current avatar. In this post, we will review the efficacy of the NDA’s schemes and examine the challenges ahead.

PM Jan Dhan Yojana

A remarkable program introduced by the NDA, the Jan Dhan Yojana offers every household a basic bank account with a RuPay debit card that includes accident insurance worth INR 1 lakh. Since its launch in August 2014, more than 17 crore accounts were opened across the country. The number of zero balance accounts dropped from a 45% high in August 2015 to 24% in December 2016 (see figure below). The Centre’s next priority is to deposit subsidies directly into beneficiary accounts.



These bank accounts are vulnerable – ghost beneficiaries and Ponzi scheme operators transferred large amounts of funds without the knowledge of many account holders. Linking Aadhaar numbers to Jan Dhan bank accounts will help mitigate this problem, and also save the Government INR one lakh crore annually.

PM Mudra Yojana

In April 2015, the Ministry of Finance introduced the NDA government’s flagship scheme to finance small business enterprises across rural India. The MUDRA bank grants loans to micro-finance institutions and non-banking financial institutions, which then grant loans to micro, small, and medium enterprises (MSMEs). There are three loan categories: Shishu (up to INR 50,000), Kishor (INR 50,000 to 5 lakh), and Tarun (INR 5 to 10 lakh).

MUDRA’s initial corpus was INR 20,000 crore with a credit guarantee corpus of INR 3000 crore. The program achieved 100% of the targeted disbursement in FY 2016-17(see figure below) with INR 1.8 lakh crores disbursed to over four crore accounts. The target for FY 2017-18 is an ambitious INR 2.44 lakh crores.



In its current form the scheme reaches only a small, educated segment. Unable to meet the security necessary for the loan, the uneducated are left out.

Deen Dayal Upadhaya Gram Jyoti Yojana

Replacing the existing Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), this scheme aims to provide continuous power supply to rural India. The government invested INR 75,600 crore for rural electrification and plans to connect 18,452 non-electrified villages by May 1, 2018. The electrification process has been divided into 12 stage milestones with defined timelines to fit the 12-month implementation schedule. The current status of electrification can be seen in the figure below.



The ground reality of rural electrification is far removed from the promising statistics seen above. A village is considered electrified if it has one pole or distribution line even if 0% of households receive power. Several cases of power theft have been reported in villages that have been electrified, yet there are no strong measures in place to discourage theft.

Soil Health Card (SHC) Scheme

Under this scheme a farmer receives a printed report (SHC) every three years for each of his holdings that details soil health based on 12 nutrients. The report also recommends fertilisers and soil amendments for each holding. As seen in the figures below, the Government met their target of testing 2.53 lakh crore soil samples. They issued 9.52 crore SHCs in Cycle I (2015-16 and 2016-17) – about 2.46 crores short of target. For Cycle II (2017-18), the government intends to test 127 lakh soil samples and issue 6 crore SHCs.


Note:  With Cycle II (FY18) still on-going, the progress shown in the charts above is not indicative of final performance. 

PM Krishi Sinchai Yojana

An amalgamation of many schemes, the PMKSY has a budget of INR 5300 crore to finish initiatives such as the faster completion of on-going irrigation projects (AIBP), creation of new water sources and improvement in efficiency of farm water usage (Har Khet Ko Paani), precision irrigation and adoption of technology (More Crop Per Drop), and building water harvesting structures (Watershed).

During 2016-17, 99 Major/Medium Irrigation Projects, with an irrigation potential of 76.03 lakh hectares, were prioritised for phased completion by December 2019. This also included their command area development work. 21 of the 99,  with a total irrigation potential of 5.22 lakh hectares, were expected to complete in June 2017. As per official data, an additional 45 priority projects in Maharashtra, Madhya Pradesh, and Odisha are progressing well and will likely be completed ahead of schedule.


Instead of a bold new programme that builds on the successes seen in Gujarat and Madhya Pradesh, the PMKSY focuses largely on converging existing central schemes, many of which were introduced by the UPA. The government should focus on the 139 districts identified by the International Water Management Institute (IMWI) as India’s most irrigation deprived. Instead, 23 large irrigation projects are taking a chunk of the scheme’s budget.

PM Fasal Bima Yojana

This scheme replaces the National Agriculture Insurance Scheme (NAIS) and revamps crop insurance. It has two objectives: (1) provide insurance coverage and financial support to farmers for crop failure, and (2) encourage farmers to adopt innovative and modern agricultural practices. Though coverage is compulsory for loanee and optional for non-loanee farmers, insurance is offered to all farmers including sharecroppers and tenant farmers.

Unlike NAIS, the Fasal Bima Yojana caps premium rates for horticulture products at 5%, is compulsory for all states, sets no upper limit on government subsidy, covers yield losses from non-preventable risks (largely defined as natural disasters), makes technology mandatory, and provides insurance to all farmers.

Parting Thoughts

While a few of the NDA’s schemes are a refreshing change from the previous government’s approach, some still disappoint. The focus on development is on the back of affordable and easily available technology. This indicates the government’s interest in transparency, the lack of which, at the state level, is hindering implementation.

The Jan Dhan Yojana and MUDRA Yojana have consistently met targets because the Centre has had greater control. Issues arise when distribution of funds at the state level do not reach the intended constituency. Because the ground reality often differs significantly from the statistics presented in graphs, the Centre should stress verification and reliability of all project data.

Going forward, the Centre must balance the need to implement and execute its schemes with convincing follow up to ensure real growth and development.

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