New Delhi : The Union Cabinet on Wednesday cleared the much-touted new crop insurance scheme at a very low premium payout of only 2% on Kharif crops, 1.5% on Rabi crops and 5% on annual commercial and horticulture crops like cotton by farmers.
The scheme christened as ”Pradhan Mantri Fasal Bima Yojana” will come into force from coming April 1 for the Kharif crops.
Since the premium rate was too low to be viable for any insurance company, the central and the state governments will share the balance premium, its beauty being that there would be no upper cap on the Central subsidy even if it goes up to 90%.
So far the farmers had to pay 15% premium, mandatory if they take the bank loans, and that too with a cap to limit the government outgo on the premium subsidy. This capping has been removed and the farmers will get the claim against the full sum insured without any reduction. They can insure crops even if they take no bank loan.
Home Minister Rajnath Singh, Parliamentary Affairs Minister M Venkaiah Naidu and Agriculture Minister Radhe Mohan Singh announced the scheme at a joint press conference, pointing out that it seeks to remove all shortcomings in the previous two schemes brought in 1999 and 2010.
Delay in payments in case of crops destroyed in the natural calamities has been addressed by planning capture of the damage through the smart phones and remote sensing system to ensure payment to farmers at the earliest, they said.
