As the 20th installment of the PM-Kisan Samman Nidhi Yojana nears—likely to be credited by June or July 2025—new research sheds light on how Indian farmers are actually utilizing this financial support. Despite its goal of supporting agricultural investment, the scheme’s ₹6,000 annual payout is increasingly being diverted toward household expenses.
A Brief Look at PM-Kisan: Purpose vs. Practice
Launched in December 2018, the PM-Kisan Samman Nidhi Yojana was designed to empower small and marginal farmers by offering financial support to invest in modern farming practices. Under the scheme, farmers receive ₹6,000 annually in three equal installments directly into their bank accounts.
However, five years into the scheme, multiple independent and government-backed studies suggest that the intended impact of this support is falling short—particularly when it comes to encouraging agricultural growth.
Ground Reality: Majority of Funds Used for Daily Needs
According to data from installments disbursed between 2020 and 2023, farmers have been spending between 50% and 83% of the funds on farming-related activities. The rest? It’s going toward essential household needs such as food, education, and medical expenses.
This isn’t necessarily misuse—it’s a reflection of financial distress. Many smallholders find themselves forced to prioritize survival over agricultural investment.
Eastern Uttar Pradesh: Modest Gains, Mixed Results
A study conducted by Allahabad University’s Agro-Economic Research Centre across four districts of eastern UP found only a 9.85% increase in annual farm income among PM-Kisan beneficiaries compared to non-beneficiaries. That’s ₹48,334 versus ₹43,573 per year on average.
Crop yields also saw marginal improvements—paddy increased by 3.08% and wheat by 1.93%.
Where did the money go? Here’s a breakdown:
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Tillage: 40.82%
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Fertilizers: 22.69%
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Seeds: 21.01%
While this shows some alignment with the scheme’s goals, the scale of improvement remains underwhelming given rising input costs and inflation.
Western UP: Higher Diversion to Household Spending
In contrast, research by Meerut College in 2023, based on a sample of 550 farmers across seven districts, painted a starker picture. About 48% of PM-Kisan funds were spent on household expenses, while only 42% went into agriculture, covering seeds, fertilizers, irrigation, electricity, and equipment rental.
This suggests that for many, the funds act as a financial cushion rather than an agricultural investment tool.
Farm Size Matters: Bigger Land, Bigger Investment
Spending patterns also vary significantly based on landholding size:
| Farmer Category | Agriculture Spend | Household Spend |
|---|---|---|
| Marginal (<1 ha) | 46% | 47% |
| Small (1–2 ha) | 17% | 83% |
| Semi-medium (2–4 ha) | 14% | 72% |
| Medium (4–10 ha) | 50% | 38% |
The trend is clear: the smaller the landholding, the greater the financial stress, leaving little room for reinvestment in farming.
Expenditure Snapshot: Where the Money Went
In total, beneficiaries spent ₹1.07 crore across various needs. Here’s how it broke down:
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Household needs (food, education, health): ₹51.7 lakh (48%)
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Fertilizers: ₹21.7 lakh (20.14%)
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Seeds: ₹15.1 lakh (14.07%)
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Irrigation: ₹8 lakh (8%)
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Electricity (home/tubewell): ₹10.7 lakh (10%)
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Farm equipment: ₹43,120 (0.4%)
For context, the average monthly income from agriculture was around ₹12,091, while expenses averaged ₹16,800—a deficit of ₹4,709. The ₹6,000 annual PM-Kisan grant barely dents this gap.
Maharashtra’s Marathwada Region: Seasonal Spending Patterns
A separate study by VNMKV University in Parbhani explored how 300 farmers from six talukas in Beed and Nanded districts used their PM-Kisan payouts across the 2021–22 and 2022–23 financial years.
Spending Trends (2021–22):
| Installment | Agri Spending | Non-Agri Spending |
|---|---|---|
| April–July (1st) | 58.33% | 41.67% |
| August–November (2nd) | 52.66% | 54.00% |
| December–March (3rd) | 15.00% | 78.33% |
Spending Trends (2022–23):
| Installment | Agri Spending | Non-Agri Spending |
|---|---|---|
| First | 68.33% | 31.67% |
| Second | 80.33% | 19.67% |
| Third | 28.67% | 71.33% |
This pattern reveals that early-year installments are more likely to be spent on farming, while year-end payments often cover off-season domestic needs.
The Bigger Picture: A Lifeline, Not a Catalyst
The findings across multiple states and years point to a common reality—PM-Kisan acts more as a financial buffer than a growth driver. For millions of farmers, especially marginal and smallholders, the ₹6,000 annual aid is insufficient to meaningfully boost agricultural productivity.
As the government gears up to release the 20th installment, the conversation must shift toward whether increased payouts, targeted subsidies, or policy reforms can make a real difference on the ground. For now, PM-Kisan offers relief—but not the transformation it once promised.