The Modi government, on August 9, 2019, launched the Pradhan Mantri Kisan Maan Dhan Yojana (PM-KMY), a social-security programme, aimed at 120 million cultivators categorised as ‘small and marginal’ as they own less than two hectares of land.
Eligible farmers can register themselves for the pension scheme, a voluntary scheme, by visiting the nearest common service centre and enrol for welfare programmes known as centrally sponsored schemes. After enrolment, the farmers are required to start paying a monthly premium. The Life Insurance Corporation of India (LIC) would be the Pension Fund Manager and responsible for pension pay out.
Along with other pension schemes like Atal Pension Yojana, it is expected to increase social security coverage.
On completion of 20 years, a farmer would be eligible for a monthly pension of ` 3,000. In contrast, under the Employees’ Provident Fund Organisation (EPFO), industrial workers qualify for a minimum monthly pension of ` 1,000, depending on their category and contribution. Participation is compulsory. Plans are to increase it to a minimum of ` 3,000 a month for the informal sector as in the scheme for the farmers—through the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) scheme.
Under the Pradhan Mantri Kisan Maan Dhan Yojana, farmers who enrol are required to pay monthly premiums depending on their age. A farmer who opts for the scheme at 18 years, the entry-level age, would pay a monthly premium of ` 55, with an equal share coming from the central government. A farmer aged 40—the maximum age of eligibility—would have to pay ` 200. The monthly contributions would fall due on the same day every month as the enrolment date. The beneficiaries may also choose to pay their contributions on quarterly, four-monthly, or half-yearly basis. The central government, a co-contributor under the scheme, would pay half of the premium.
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. If the spouse wants to exit the scheme, a value equal to the total premiums along with interest is payable to the nominee. Spouses of farmers who die after superannuation of the scheme are eligible for half the monthly pension amount of ` 1,500.
Farmers who are beneficiaries of ` 6,000 as part of the PM-KISAN scheme, an income-transfer programme started by the Modi government, can choose to get their premiums deducted from this amount.