Background
Prime Minister Narendra Modi’s government is considering doubling the annual payout to landowning female farmers to Rs 12,000, three sources with knowledge of the matter told Reuters, a move likely to appeal to women voters ahead of a general election. The plan is likely to be announced in the budget on February 1 and could cost the government an additional Rs 12,000 crore ($1.44 billion), said two of the sources, all of whom declined to be named discussing a budget proposal.
Current Scheme
It will build on an existing programme that Modi, who will be seeking a third term in elections due by May, announced before the last national election in 2019. Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, the government pays Rs 6,000 per year to all farmers who own up to two hectares of land, regardless of their gender. The scheme covers more than 120 million farmers and costs the government about Rs 75,000 crore annually.
Proposed Change
The plan to double the cash support and target it toward women has not been previously reported. The agriculture ministry declined to comment while the finance ministry did not respond to an email seeking comment. There are more than 260 million farmers in India and along with their families, they are a massive voting bloc in the country of 1.4 billion people. Women account for 60% of all farmers but fewer than 13% of them own the land they sow, according to government data. The proposed change is expected to benefit about 30 million women farmers who own land.
Political Implications
The move is seen as an attempt by Modi’s Bharatiya Janata Party (BJP) to woo women voters, especially in rural areas where they have traditionally supported opposition parties. Women voters outnumbered men in 13 out of 28 states and union territories that went to polls in 2019, according to the Election Commission of India. The BJP won a landslide victory in that election, securing 303 out of 543 seats in the Lok Sabha, the lower house of parliament. The BJP also increased its vote share among women from 31% in 2014 to 37% in 2019, according to a post-poll survey by Lokniti-CSDS.
Economic Impact
The cash handout for women farmers is also expected to boost rural consumption and economic growth, which has been hit hard by the COVID-19 pandemic and lockdowns. India’s gross domestic product (GDP) contracted by 7.3% in the fiscal year that ended in March 2021, the worst performance since independence in 1947. The government expects the economy to grow by 9.5% in the current fiscal year, but some analysts have warned of downside risks due to the emergence of new variants of the coronavirus. According to provisional estimates released by National Statistical Office (NSO), Indian economy in 2021-22 has fully recovered the pre-pandemic real GDP level of 2019-20. The real GDP growth in 2021-22 stands at 8.7 per cent, 1.5 per cent higher than the real GDP of 2019-20. India’s GDP in nominal terms is now Rs.236.65 lakh crore or US$ 3.2 Trillion in 2021-22 as compared to the pre-pandemic nominal GDP of US$ 2.8 Trillion in 2019-20. As per the IMF’s latest World Economic Outlook (WEO) growth projections released on January 25, India’s real GDP is projected to grow at 9 per cent in both 2021-22 and 2022-23 and at 7.1 per cent in 2023-24. This projects India as the fastest growing major economy in the world in all these three years.