THE CONTEXT: The Union Cabinet approved the Prime Minister Dhan-Dhaanya Krishi Yojana (PMDDKY) on 16 July 2025, committing ₹24,000 crore annually for six years (FY 2025-26 to 2030-31). The mission will converge thirty-six Central schemes across eleven Ministries to revitalise 100 low-performing agricultural districts. This push comes even as the share of Agriculture and Farmers’ Welfare in the total Central Plan outlay has slid from 3.53 per cent (2021-22) to 2.51 per cent (2025-26), signalling a widening resource gap.
Yield gaps within many States remain stark: cereal productivity can differ by 40–60 per cent between best- and worst-performing districts, while average national cropping intensity is 155 per cent (2021-22) but languishes below 120 per cent in several rain-fed belts. These structural imbalances, coupled with patchy credit flow and fragmented extension networks, constitute the “productivity paradox” that frames the scheme’s raison d’être.
CONCEPTUAL & THEORETICAL LENS:
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- Convergence Theory & District-as-Unit Paradigm: PMDDKY borrows the logic of the Aspirational Districts Programme (ADP): identify “binding constraints” at the district level, then solve them through cross-sectoral synergies rather than isolated subsidies. By ranking districts on 117 Key Performance Indicators (KPIs) every month, the design aims to trigger knowledge spillovers and healthy inter-district competition.
- Inclusive-Growth & SDG Alignment: The five declared objectives of raising productivity, diversifying crops, strengthening post-harvest infrastructure, improving irrigation and widening credit—map directly to SDG 2 (Zero Hunger), SDG 12.3 (halving food loss) and the G-20 “Deccan Principles” (2023) on resilient agri-value chains. Anchoring KPIs in India’s National Indicator Framework tightens the audit chain from district plans to global targets.
SALIENT FEATURES OF PMDDKY:
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- Targeting Logic: 100 districts chosen on three filters—low productivity, moderate cropping intensity, and below-average agricultural credit; minimum one district per State to retain geographic balance.
- Institutional Architecture: Each district constitutes a “Dhan-Dhaanya Samiti” chaired by the Collector, with progressive farmers and line-department officials; State-level Steering Committees and Central Nodal Officers (CNOs) provide vertical handholding.
- Financial Pattern: Cost-sharing remains 60:40 between Centre and States (90:10 for the North-East and Himalayan States). Funds must demonstrate additionality—States cannot replace their own expenditure with Central money.
- Tech Backbone: A public dashboard tracks 117 KPIs-ranging from seed replacement rate to women-led Farmer Producer Organisations (FPOs) and publishes monthly delta-rankings like the ADP scorecard.
POLITICAL-ECONOMY & FEDERAL DYNAMICS:
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- Competitive–Co-operative Federalism Dialectic: Monthly rankings can spur a “race to the top” but may also widen disparities if weaker States lack implementation bandwidth. Hence, PMDDKY doubles as a testbed for second-generation fiscal federalism, where performance-linked transfers and capacity-building grants accompany convergence mandates.
- State Capacity Gradient: World Bank’s GovTech Maturity Index (GTMI-2022) shows pronounced sub-national variation: Tamil Nadu and Karnataka exceed a composite score of 0.70, while Bihar clusters near 0.40, indicating that dashboard-heavy monitoring frameworks could overwhelm low-capacity administrations without parallel skill support.
BEHAVIOURAL & SOCIO-CULTURAL LENS:
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- Farmer Decision Architecture: A 2023 Karnataka “Ag-INSURE” nudge pilot demonstrated that timely SMS reminders on premium due-dates lifted crop-insurance enrolment by 18 per cent. Embedding similar nudges of soil-moisture alerts, default insurance enrolment into PMDDKY can accelerate behavioural shifts.
- Gender Asset-Gap Audit: Women operate only 9 per cent of agricultural holdings (Agricultural Census 2015-16), with regional highs of 28 per cent. PMDDKY’s sex-disaggregated KPIs and earmarking at least one-fifth of funds for women-led Self-Help Groups (SHGs) can close this gap and leverage the proven productivity premium of female-managed farms.
TECHNO-LEGAL-FINANCIAL STACK:
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- Data-Trust & Algorithmic Accountability: An open-API platform with blockchain audit trails ensures traceability of every rupee, limits “ghost beneficiaries” and complies with the Digital Personal Data Protection Act (DPDPA, 2023) through consent-based data wallets for farmers.
- Innovative Finance: Maharashtra is piloting a “Cotton Pay-for-Success Bond” in which investor returns hinge on verified yield gains—an early example of outcome-based, blended finance that PMDDKY districts can emulate to crowd-in private capital for post-harvest value-chains.
- Credit Deepening: Linking Kisan Credit Cards (KCC) to district scorecards, and incentivising banks through priority-sector bonus points, addresses the below-average credit filter used to select PMDDKY districts.
ENVIRONMENTAL, CLIMATE & RESILIENCE MATRIX:
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- Nature-Positive Pathways: Converging PM Krishi Sinchai Yojana-II micro-irrigation funds with regenerative farming incentives could reduce the water footprint of rice by 30 per cent per tonne in water-stressed belts.
- Climate-Risk Stress-Testing: IPCC WG-II simulations project a > 2 °C temperature rise in Bundelkhand by 2040, intensifying drought frequency; district plans must therefore include heat-tolerant cultivars, solar pumps and contingency seed kits.
- Carbon-Revenue Potential: By monetising soil-organic-carbon gains through voluntary carbon markets, districts can create an additional revenue stream, advancing India’s Panchamrit pledge of carbon neutrality by 2070.
VALUE-CHAIN & MARKET SYSTEMS PERSPECTIVE:
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- Post-Harvest Infrastructure Gap: A 2024 NABARD study finds India has barely 250 fully equipped pack houses against an estimated need of 70,000, causing post-harvest losses of 25-30 per cent in perishables. PMDDKY funds dedicated 10-tonne solar cold-stores at gram-panchayat level, directly attacking this bottleneck.
- Digital Market Integration: Inter-operability between the electronic National Agricultural Market (e-NAM) and the Open Network for Digital Commerce (ONDC-Agri) promises end-to-end price discovery from farm-gate to retail shelf, increasing farmer share in consumer rupee.
HUMAN CAPITAL & KNOWLEDGE SYSTEMS:
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- Agri-Skill Ladder & Youth Dividend: Aligning Pradhan Mantri Kaushal Vikas Yojana 4.0 courses with district crop plans can train one million “Agri-Tech Associates” over six years, reversing rural youth out-migration and boosting labour productivity.
- Extension 4.0: A 2024 Punjab trial integrating AI chat-bots with Krishi Vigyan Kendras (KVKs) reported a 22 per cent yield jump; PMDDKY should institutionalise performance-linked grants to KVKs achieving more than 15 per cent tech-adoption gains.
THE CHALLENGES:
| Dimension | Core Challenge | Illustrative Risk |
|---|---|---|
| Design | District selection may ignore land-degradation indices | Resources mis-allocated to moderately healthy districts |
| Implementation | Capacity asymmetry & data-quality gaps | “Dashboard fatigue” and weak field verification |
| Financing | States might substitute rather than supplement spending | Erodes “additionality” principle |
| Equity & Sustainability | Ground-water stress, gender-norm constraints, smallholder absorptive capacity | Deepen rural distress if safeguards absent |
THE WAY FORWARD:
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- Outcome-Based Budgeting: Ring-fence 30 % of Central funds to verified KPI gains; release tranche-II only after third-party audit.
- Gram-Sabha-Centric Crop Plans: Integrate India Meteorological Department seasonal forecasts into community-approved calendars for climate-smart decisions.
- Blended-Finance Facility: Launch a “Dhan-Dhaanya Development Finance Platform” to co-invest with impact investors in FPO aggregation and processing.
- Farmer Data Wallets: Deploy consent-based wallets (DPDPA-compliant) so farmers port their soil, credit and insurance records across service providers.
- Gender-Responsive Budgeting: Earmark a minimum 20 % of district allocation for women-led SHGs/FPOs and track sex-disaggregated KPIs.
- Agro-Ecological Transition: Make fertiliser subsidy reimbursement conditional on Soil-Health Card compliance and regenerative benchmarks.
- Institutionalised MEL: Third-party audits every kharif and rabi; dashboards open for social audit to strengthen downward accountability.
- Climate-Risk Micro-Insurance: Bundle index-based riders with PM Fasal Bima Yojana, subsidising premiums for smallholders in high-risk agro-zones.
THE CONCLUSION:
PMDDKY has the architecture to become India’s next big agricultural inflection point: district-centric convergence married to digital transparency and performance-linked finance. Success, however, hinges on three pivots—bridging capacity gaps in laggard States, embedding climate resilience, and safeguarding inclusivity for women and smallholders.
UPSC PAST YEAR QUESTION:
Q. Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY) 2016
MAINS PRACTICE QUESTION:
Q. Convergence of schemes at the district level is a double-edged sword for Indian agriculture. Critically analyse the Prime Minister Dhan-Dhaanya Krishi Yojana in this context, suggesting robust safeguards to maximise benefits while mitigating risks.
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