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The first instalment of Rs 2,000 will be handed over to the farmers by the PM himself.
In a special gesture, Prime Minister Modi on Tuesday received Saudi Arabia's Crown Prince Mohammed bin Salman at the airport last night.
Modi and the Saudi Crown Prince explored ways to further deepen strategic ties against the backdrop of escalating tensions between India and Pakistan following the Pulwama terror attack.
New Delhi would strongly take up the issue of cross border terrorism and the support Islamabad was extending to terror groups carrying out attacks on India, government sources said.
The Aam Aadmi Party (AAP) Tuesday said it will hold a door-to-door campaign to tell people how the BJP had done them "injustice" on the issue.
Instead of attending the meeting over such a serious issue, Modi chose to address rallies elsewhere, the former Union minister said.
The prime minister said in addition, to health problems and destruction of families due to substance abuse, narcotics trade is a great threat to the safety and security of the country.
Saudi has made a very strong denouncement of Pulwama terror attack and did not accept Pakistan's narrative.
Another senior Congress leader Kapil Sibal also hit out at the government over the Pulwama terror attack on Tuesday.
Speaking at the "Tagore Award for Cultural Harmony" event here, Modi said India's multi-dimensional heritage was well reflected in the works of the first Indian Nobel laureate.
PM Modi issues another warning to Pakistan over Pulwama attack, says time to talk about tackling terror is over
After talks with Argentine President Mauricio Macri, Modi said dithering to take action against terrorists and their supporters will be like encouraging terrorism.
Traffic crawls in the ancient city of Varanasi, also called Kashi, while dust swirls on highways on account of roadworks being carried out.
As the protests continued for the third day on Sunday, police enhanced security in the national capital with special deployments in the protest areas.
Talking about the gift milk scheme, which he inaugurated here prior to his speech, Modi said the initiative will improve the nutritional standards of children in government schools.
Maharashtra Congress accused PM Modi of raising nationalistic fever centred on the Pulwama attack even as mortal remains of its martyrs was en route to native villages for last rites.