"Direct income transfers like PM-KISAN are a more efficient substitute for input subsidies in Indian agriculture." Discuss.

Input subsidies on fertiliser, power and credit lower the cost of cultivation but distort input use, while PM-KISAN — a Central Sector Scheme transferring ₹6,000 a year in three instalments through Aadhaar-seeded DBT [2] — gives farmers untied purchasing power. The claim is largely valid on efficiency grounds, but only partially on equity and adequacy.

Case for income transfers as a superior instrument

• Fiscal targeting: the Department of Fertilizers alone carries a net allocation of about ₹1.71 lakh crore in 2026-27, including ₹1.17 lakh crore on urea subsidy [3]. PM-KISAN's annual outflow is far smaller yet reaches 9.44 crore farmers directly [1].
• Leakage control: mandatory Aadhaar seeding, e-KYC and land-record seeding weeded out ineligible beneficiaries; the portal is integrated with PFMS for real-time tracking [4].
• Crop and input neutrality: unlike subsidised urea and free power, which push nitrogen overuse and groundwater depletion, an untied transfer leaves the choice of crop and input mix to the farmer.
• Measured impact: NITI Aayog and IFPRI evaluations report higher farm investment and reduced dependence on informal credit [4].
• Inclusion: 2.18 crore women farmers received the 23rd instalment released at Hooghly on 20 June 2026 [1].

Limits of the substitution argument

• Exclusion of the landless: eligibility rests on cultivable landholding [2], leaving out tenant farmers, sharecroppers and agricultural labourers — the poorest in the farm economy.
• Adequacy: ₹6,000 per family a year is a consumption floor, not a substitute for the working-capital cushion input subsidies provide before sowing.
• Federal and data dependence: identification rests with States; weak or contested land records delay entitlement.
• Price stability: fertiliser subsidy also insulates farmers from global price volatility, a function transfers cannot perform.

Income transfers are therefore best seen as a complement rather than a clean replacement. A calibrated path — rationalising urea subsidy while widening PM-KISAN to tenant cultivators through State tenancy registries, alongside MSP and PMFBY — would preserve efficiency without sacrificing the equity mandate of Article 39(b).