GS Mains Model Question & Answer: Discuss Pradhan Mantri
Fasal Bima Yojana 2016 and its impact on Agriculture in India
Q. Discuss Pradhan Mantri Fasal Bima Yojana 2016 and
its impact on Agriculture in India . (12.5 Marks)
(General Studies Mains Paper III- Economy : Major crops cropping patterns
in various parts of the country)
Model Answer :
Prime Minister Shri Narendra Modi unveiled the new scheme Pradhan Mantri
Fasal Bima Yojana (PMFBY) on 13th January, 2016.
This scheme will help in decreasing the burden of premiums on farmers who
take loans for their cultivation and will also safeguard them against the
It has also been decided to make the settlement process of the insurance
claim, fast and easy so that the farmers do not face any trouble regarding the
crop insurance plan. The 'Pradhan Mantri Fasal BimaYojna' will also rid farmers
of the web of complex rules of the earlier insurance schemes.
This scheme will be implemented in every state of India, in association with
respective State Governments.
The scheme will be administered under the Ministry of Agriculture and Farmers
Welfare, Government of India.
The PMFBY will replace the existing two schemes National Agricultural
Insurance Scheme as well as the Modified NAIS.
Broad Objectives :
The objectives of this scheme is :
(a) 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.
(b) to stabiles the income of farmers to ensure their continuous process in
(c) to encourage farmers to adopt innovative and modern agricultural practices.
(d) to ensure flow of credit to the agriculture sector
Main points of the scheme :
- 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 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 in any natural calamities.
- There is no upper limit on Government subsidy. Even if balance premium
is 90%, it will be borne by the Government.
- Earlier, there was a provision of capping the premium rate which is low
claims being paid to farmers. Now this is removed and farmers will get claim
against full sum insured without any reduction.
- The use of technology will be encouraged to a great extent. Smart
phones, Remote sensing drone and GPS technologies will be used to capture
and upload data of crop cutting to reduce the delays in the claim payment.
- Allocation of the scheme presented in budget 2016-2017 is Rs.5, 550
- The insurance plan will be handled under a single insurance company,
Agriculture Insurance Company of India (AIC).
- PMFBY is a replacement scheme of National Agriculture Insurance Scheme (NAIS)
and Modified National Agriculture Insurance Scheme (MNAIS) and hence
exempted from the service tax.
Farmer’s Friendly and Game Changer :
- There are a few significant features about the new scheme and this will
make it both – farmers’ friendly and a game-changer in the long run.
- 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.”
- Making use of technology mandatory will also improve operational
efficiency and will be beneficial to both - the farmers and the insurers,
experts and insurance players say.
- Additionally, since farmer's premium will be down, the uptake of
policies would be high. Moreover making the new crop insurance scheme
mandatory for states will also mean there will be increase in the list of
- Adding catastrophic events also to this cover to protect farmers against
crop loss/damage due to incidents like cyclone would be beneficial to all
stake holders yet again.