PMFBY YOJNA

1. Presented to – Mr Nitin Barker Presented By-
Vivek Jha 17MBAAB087
Giriraj Nagar 17MBAAB012
Shubham Kumar 17MBAAB047
Kapil Deo Singh 17MBAAB093
Prem Pal 17MBAAB093

2. Introduction
Agriculture in India is wholly depends on nature. Crop
insurance scheme has been implemented to protect
the farmers from perils of nature. This program has
been approved by cabinet ministry and started to help
farmers to get crop insurance at lower premium rate. It
was launched by prime minister Mr. Narendra Modi
on 18 February 2016 in a Kisan MahaSammelan at
Sehore Madhya Pradesh, to help the farmers and
which can help to boost agricultural production. This
scheme will replace National Agricultural
Insurance Scheme (NAIS) which is started in 1999.

4. Important features of PMFBY
 It is the biggest ever government contribution to a crop
insurance program.
 Government will bear largest ever financial burden even if
the government share exceeds 90%.
 Farmers will have to pay lowest premium rate.
 There will be one premium rate for each season for all food
grains.
 Premium for kharif - 2% rabi – 1%.
 Farmers will get full insurance cover.
 It is for the first time the post harvest losses arising from
cyclones and unseasonal rains have been covered
nationally.

5.  For the first time emphasis has been given to mobile
and satellite technology to facilitate accurate
assessment and quick settlement of claims.
 New scheme removes the previous capping on
premium.
 Use of simple and smart technology in farming

7. Highlights 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 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.

8.  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 crop cutting
experiments.

9.  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.

10. PROVISION OF BUDGET UNDER
PMFBY
The Pradhan Mantri Fasal Bima Yojana (PMFBY) has
received an additional impetus with the government
allocating Rs 9000 crore for the scheme. In 2016-17,
they were allocated Rs 5500 crore. Finance minister
Arun Jaitley in his Budget speech said that the
coverage under the scheme will be increased to 50
percent of cropped area in 2018-19,

11. Crops covered under this scheme
Under this new crop insurance plan , the premium rates
will be discounted from the existing rates for all types
of crops like Kharif crops , Rabi crops , horticulture
crops and commercial crops important features below
 The Rabi crops include wheat , barley , oats , gram,
linseed , mustard etc
 The Kharif crops include rice , maize ,sorghum ,
pearl millet/ bajra, finger millet / ragi (cereals) ,
arahar (pulse), soyabean, groundnut (oilsseds), cotton
etc.

13. Farmers to be covered
 All farmers growing notified crops in a notified area
during the season who have insurable interest in the
crop are eligible.
 Compulsory coverage : The enrolment under the
scheme, subject to possession of insurable interest on
the cultivation of the notified crop in the notified area,
shall be compulsory for following categories of
farmers:
 Farmers in the notified area who possess a Crop Loan
account/KCC account (called as Loanee Farmers)-

14. - to whom credit limit is sanctioned/renewed for the
notified crop during the crop season. and
 Such other farmers whom the Government may decide
to include from time to time.
 Voluntary coverage : Voluntary coverage may be
obtained by all farmers not covered above, including
Crop KCC/Crop Loan Account holders whose credit
limit is not renewed.

16. Risk covered under the scheme
 Yield Losses (standing crops, on notified area basis).
Comprehensive risk insurance is provided to cover
yield losses due to non-preventable risks, such as
Natural Fire and Lightning, Storm, Hailstorm,
Cyclone, Typhoon, Tempest, Hurricane, Tornado.
Risks due to Flood, Inundation and Landslide,
Drought, Dry spells, Pests/ Diseases also will be
covered.
 In post-harvest losses, coverage will be available up to
a maximum period of 14 days from harvesting for-

17. -those crops which are kept in “cut & spread” condition
to dry in the field.
 For certain localized problems, Loss / damage
resulting from occurrence of identified localized risks
like hailstorm, landslide, and Inundation affecting
isolated farms in the notified area would also be
covered.

19. Objectives
 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.
 To stabilize the income of farmers to ensure their
continuance in farming.
 To encourage farmers to adopt innovative and modern
agricultural practices.
 To ensure flow of credit to the agriculture sector.

20. Disadvantages and flaws of PMFBY
 The total expenditure for this insurance scheme is
about 9500 Crore which is mere waste. The premiums
are very much lower for the farmers but it is difficult to
provide the promises by the government.
 As the post harvest losses are available up to the
maximum of 14 days, those crops needed to be
maintained for inspections by respective officials in
order to process the claim procedure.
 There are certain notified crops which are considered
under this crop insurance scheme and the insurance-

21. -coverage will be beneficial only if the farmers planted
those specific crops in their field.
 Though, the claim will be settled properly into the
bank account of the farmers. However, there’s only one
insurance company is available for this scheme for the
entire state, which may affects cash flow.

22. Conclusion
 Success of any government scheme depends on its
sincere implementation. The key problem such as poor
land records, flawed land titles, corruption etc are
common challenges any crop insurance scheme in
India face. Further the success of the scheme is
depends on how sincerely it is implemented by the
insurance companies. Further we need to wait and
watch as to how the scheme is monitored and
supervised