The Union Finance Minister Shri Aurn Jaitley launched the Pradhan Mantri Fasal Bima Yojana and the Unified Package Insurance Scheme in Mumbai today. Following-up his focus on the agriculture sector in the General Budget 2016-17 presented by him in Parliament on 29th February, 2016, Shri Jaitley said “agriculture will have to grow faster for the country to get rid of poverty and push the overall GDP expansion”. He said that agriculture was absolutely critical to the economy.

The Finance Minister Shri Jaitley said that the revamped insurance scheme being launched by the Government have the potential to reduce distress in the farm sector. He said that they would be rolled-out in a ‘mission mode’ from April1, 2016 to cover Kharif crops. The Finance Minister Shri Jaitley said though the country had crop insurance schemes in the past, those were mainly linked to the crop loans and therefore, met with a modest level of success.

“This is a crop insurance scheme with a difference, and the difference is absolutely critical to the Indian farmer” Shri Jaitley said. He added that since the new scheme was dependent on large volume, it would cover much larger risks at a very low premium. The farmers’ premium would be 2% for Kharif foodgrains and oilseeds crops and 1.5% for rabi crops. In the event of a crop failure, a farmer will be paid more. The Finance Minister said the Government aims to cover 50 percent of the farmers, mostly those depending upon rain-fed agriculture.

The Finance Minister Shri Jaitley said with two successive deficit monsoons behind us, a poor rainfall this year would put the systems to test. He asserted that in that event, the successful implementation of the New Crop Insurance Scheme could become a game changer. He said the entire strength of the Indian banking, insurance and financial system would be mobilized to ensure its success.

The Finance Minister said “the scheme has the potential to reduce distress in the farm sector and end the scar of farmer suicides affecting parts of our country.” He also said it was a significant step towards making India an ‘insured and pensioned society”.

The New Crop Insurance Scheme also provides for a change in criteria to determine crop losses by providing local level assessment for calamities like hailstorms etc. Simple technology through phones and remote sensors would be used for quick estimation and early settlement of claims.

Earlier, the Finance Minister Shri Jaitley launched the NABARD Agri-Credit Monitoring portal, which will help financial institutions to monitor the status of agricultural loans given to farmers. He also unveiled Roadmap of E-Shakti Expansion Programme of digitization of Self-Help Groups (SHGs).

Ms. Anjuly Chibb Duggal, Secretary, Department of Financial Services (DFS) said the New Crop Insurance Scheme had been drafted with intense consultations with concerned stakeholders. She further urged that the schemes should percolate to the ground level by bringing large mass of farmers in the insurance net. She also said that the government may impose penalty if there were delays in settling crop insurance schemes.

Dr. Harsh Kumar Bhanwala, Chairman, NABARD expressed his bank’s solidarity with all stakeholders in covering 50% of the farming community in India.

Crop insurance scheme expands low-premium coverage, using local loss assessment and technology for faster claim settlement. The New Crop Insurance Scheme establishes a low-premium, large-volume insurance framework to expand farmer coverage and reduce farm-sector distress by mobilising banking, insurance and financial systems. It modifies loss-determination through local level assessment for calamities and mandates rapid estimation and early settlement of claims using mobile and remote-sensing technology. Complementary measures include a NABARD Agri-Credit Monitoring portal to track agricultural loans and an E-Shakti roadmap for digitising Self-Help Groups, with stakeholder consultation and possible penalties for delayed claim settlement.