CENTRAL GOVERNMENT SCHEMES
Pradhan Mantri Fasal Bima Yojana (PMFBY)-2014
Launched: 11 October 2014
Main Objective: Provide insurance cover to rabi and kharif crops and financial support to farmers in case of damage of crops.
In order to make crop insurance simpler and cheaper for the farmers and to provide them with better insurance services, a Central Sector Scheme of Pradhan Mantri Fasal Bima Yojana (PMFSY) was launched by the Government of India replacing NAIS and MNAIS.
Under the new scheme, farmers will have to pay a uniform premium of two per cent for all kharif crops and 1.5 per cent for all rabi crops.
The scheme will be implemented from the kharif season this year, i.e. 2016.
About Complete Scheme
The new Crop Insurance Scheme is in line with One Nation – One Scheme theme. It incorporates the best features of all previous schemes and at the same time, all previous shortcomings / weaknesses have been removed. The PMFBY will replace the existing two schemes National Agricultural Insurance Scheme as well as the Modified NAIS.
1. To provide insurance coverage and financial support to the farmers in the event of failure of any of the notified crop as a result of natural calamities, pests & diseases.
2. To stabilise the income of farmers to ensure their continuance in farming.
3. To encourage farmers to adopt innovative and modern agricultural practices.
4. To ensure flow of credit to the agriculture sector.
Highlights of the scheme
1. There will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%. The premium rates to be paid by farmers are very low and balance premium will be paid by the Government to provide full insured amount to the farmers against crop loss on account of natural calamities.
2. There is no upper limit on Government subsidy. Even if balance premium is 90%, it will be borne by the Government.
3. Earlier, there was a provision of capping the premium rate which resulted in low claims being paid to farmers. This capping was done to limit Government outgo on the premium subsidy. This capping has now been removed and farmers will get claim against full sum insured without any reduction.
4. The use of technology will be encouraged to a great extent. Smart phones will be used to capture and upload data of crop cutting to reduce the delays in claim payment to farmers. Remote sensing will be used to reduce the number of crop cutting experiments.
5. PMFBY is a replacement scheme of NAIS / MNAIS, there will be exemption from Service Tax liability of all the services involved in the implementation of the scheme. It is estimated that the new scheme will ensure about 75-80 per cent of subsidy for the farmers in insurance premium.