“Will revive Jai Jawan, Jai Kisan spirit” were the exact words used by PM Narendra Modi quoting the  slogan of Ex-PM Lal Bhahadur Shastri, during his campaign trail up to the run of 2014 Lok Sabha elections. Finally the BJP led government has taken a much appreciated step towards the needs of Indian farmers, whose position amidst the recent droughts, suicides and other mishaps have simply brought down the morale of Agriculture which is considered to be the backbone of rural India. Under the Pradhan Mantri Fasal Bima Yojna (PMFBY) scheme, there will be a uniform premium of only 2 per cent to be paid by farmers for all kharif crops and 1.5 per cent for all rabi crops. In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5 per cent. Unseasonal rains and cyclonic rains across the country will count for post-harvest losses coverage and also, there is now no upper limit on government subsidy.

One might disagree that previously there have been such insurance schemes available for the farmers namely the “National Agricultural Insurance Scheme (NAIS) and Modified National Agricultural Insurance Scheme (MNAIS)” but given below is a tabular study which has differentiated the previous scheme on comparison with the current Pradhan Mantri Fasal Bima Yojna (PMFBY).

cropinsuranceThe evident points here are the removal of Cap for the Insurance Amount cover which will be subsequently have to be managed by both the State and Central, the use of much needed technology for assessing the crop loss and coverage for entire India which is currently facing a turmoil of cyclonic and Unseasonal rain. Yes it is true that once the 50 per cent of crop insurance is achieved in the next 3 years, this will create a liability of a whopping 8,800 crores to the Central Government and there by subsequently increasing the State liability as well. But saying that, this is a much welcome step for farmers to get their crops under the new insurance scheme rather than requesting the State/Central government to waive off their existing loans due to such natural calamity, thereby possibly creating a self-respect for the farmers rather than being under the complete mercy of the respective Governments to come and negate their losses.

In 2008, the then Finance Minister P. Chidambaram had announced a package of Rs 65,000 crores for waiving off the existing farmer loans in order to counter the increasing number of farmer suicides. But under the careful eyes of watchdog Public Accounts Committee (PAC), this scheme was reeking with corruption simply due to the inability of the previous government to implement the same. Also the biggest failure of the above mentioned scheme can be contributed to the fact that the then UPA government had absolutely no direct links to the farmers to transfer such subsidies to their respective accounts.


Obtaining an agricultural loan is not a walk in the park, it requires the average farmer to submit an never ending list of documents which includes very basic details like Patta of the land, Farmer Identity card to assessment and approval from the local zamindar. At each stage, the farmer has to lose an arm and leg in-order to pay bribe for all these documents and finally if he does obtain the loan, he is under the uncertainty of weather conditions. Getting the insurance claim from the companies has hardly had any success rates in the last 67 years of Independence since there is absolutely no direct links between the farmer and insurance companies which is one of the major miss under PMFBY. Also under the current scheme, there is still no vision to cover the Insurance Unit at an individual farmer level, it is still done under a tehsil/taluk level.

With the presence of schemes like Direct Benefit Transfer (DBT) and coverage of Pradhan Mantri Jan Dhan Yojana (PMJDY) which has covered nearly 17.5 crores of new bank accounts, the implementation of PMFBY with stress of technology and raising awareness among farmers should play major role in the success or failure of this scheme.