THE CONTEXT: To make the scheme more farmer friendly, Government has comprehensively revised and revamped the Operational Guidelines of the Pradhan Mantri Fasal Bima Yojana (PMFBY).
Analysis:
ABOUT PMFBY
- It provides a comprehensive insurance cover against failure of the crop thus helping in stabilising the income of the farmers.
- 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.
- 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 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.
- 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 crops cutting experiments.
- In order to ensure more efficient and effective implementation of the scheme, the central government had revamped PMFBY in the 2020 Kharif season.
- This overhauled PMFBY is often called PMFBY 2.0, it has the following features:
- Completely voluntary Enrolment 100% voluntary for all farmers from 2020 Kharif.
- Limit to Central Subsidy: The Cabinet has decided to cap the Centre’s premium subsidy under the scheme for premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops.
- More Flexibility to States:The government has given the flexibility to states/UTs to implement PMFBY and given them the option to select any number of additional risk covers/features.
- Investing in ICE Activities: Insurance companies have to now spend 0.5% of the total premium collected on information, education and communication (IEC) activities.
- The Pradhan Mantri Fasal Bima Yojana (PMFBY) is available for all States/UTs and farmers whether loanee, non-loanee, share cropper or tenant farmers on voluntary basis.
- National Crop Insurance Portal (NCIP) has been developed for ensuring better administration, co-ordination, transparency, dissemination of information and delivery of services including direct online enrollment of farmers, etc.
- Penalty provisions @12% per annum for late settlement of claims by insurance companies and late release of funds by State Governments have also been stipulated under the scheme.
