Impact of kisan vikas patra scheme on Agricultural Development

Introduction

The Kisan Vikas Patra (KVP) scheme is a renowned savings instrument launched by the Government of India with a primary focus on stimulating agricultural development. The initiative was conceived with two key objectives in mind – first, to inspire small farmers to cultivate a habit of savings and investment, and second, to support rural development, particularly in the agricultural sector. This article aims to explore the influence of the Kisan Vikas Patra scheme on agricultural development in India.

Overview of Kisan Vikas Patra Scheme

Primarily, the Kisan Vikas Patra (KVP) scheme, originally initiated in 1988, is a small savings scheme that ensures guaranteed returns. This scheme operates on the principle of compounding. It has undergone several modifications over the years to align with the evolving needs of the agricultural sector. Investments via the Kisan Vikas Patra have been designed to offer agricultural enthusiasts and small farmers with risk-free and guaranteed returns.

Impact on Agricultural Development

In terms of ground impact, the scheme works by providing a secure investment channel for farmers and agricultural workers. Moreover, it ensures liquidity to the investor since it does not lock up the investor’s money but gives the flexibility to opt for premature withdrawal if required.

Investment in Kisan Vikas Patra begins at a minimum of INR 1,000, making it affordable for small farmers and rural residents. The Kisan Vikas Patra scheme comes with a maturity period of 113 months, and the interest earned on the investment is compounded annually. Thus, if a farmer invests INR 1,000 in Kisan Vikas Patra, he/she will receive INR 2,000 after the maturity period.

The substantial financial returns from KVP investments can be aptly channelled to improve farming practices, buy new equipment, or even diversify their agricultural activities. By providing secure and guaranteed financial returns, the Kisan Vikas Patra scheme acts as a key catalyst in intensifying the productivity and efficiency of agriculture in India.

Integration with Jeevan Pramaan

The secondary component being leveraged to enrich the agricultural sector is Jeevan Pramaan, a digital life certificate for pensioners. This initiative was introduced to bring ease to the farming community by digitally streamlining the pension disbursal process for retired agricultural professionals. The convergence of Kisan Vikas Patra and Jeevan Pramaan can ease the financial management process for the agricultural sector, making it more transparent, accessible, and efficient.

Criticisms and Limitations

However, certain critics argue the Kisan Vikas Patra scheme lacks the potential to attract high net worth individuals due to the cap on the maximum investment amount. Yet, it is important to understand that the primary objective of the scheme is not to cater to high net worth individuals but to cater to the lower and middle-income groups, particularly those associated with agriculture.

Conclusion

The Kisan Vikas Patra scheme’s influence on the agricultural sector has been significant, providing farmers with a safe and secure investment option coupled with high returns. The integration of the scheme with Jeevan Pramaan further simplifies financial transactions for the agricultural field, furthering the country’s growth and reducing the economic disparity in rural India.

Disclaimer: 

The investor must weigh all the pros and cons of investing in the Indian financial market which is subject to market risks. It is recommended to make informed decisions and seek professional financial advice when necessary.

Summary:

The Kisan Vikas Patra scheme has played a transformative role in promoting agricultural development in India. By providing a risk-free and accessible investment option to small farmers, the scheme encourages savings and stimulates rural development. Coupling this with Jeevan Pramaan further simplifies financial transactions for the agricultural sector. However, it is of utmost importance that investors weigh all pros and cons before making financial decisions, given that the Indian financial market carries inherent risks.