Government cuts its share in flagship crop insurance scheme

Why is it in the news?
  • The Central government has almost halved its contribution to its own flagship crop insurance schemes- Pradhan Mantri Fasal Bima Yojana (PMFBY).
  • Centre slashed its share of the premium subsidy from the current 50% to just 25% in irrigated areas and 30% for unirrigated areas from the kharif season of 2020.
More in the news
  • Steps by Central Government:
(1) The Union Cabinet approved the revamp of the PMFBY and the Restructured Weather Based Crop Insurance Scheme.
(2) Enrolment in the two schemes has been made voluntary for all farmers, including those with existing crop loans.
(3) When the PMFBY was launched in 2016, it was made mandatory for all farmers with crop loans to enroll for insurance cover under the scheme.
(4) The revamp in PMFBY now reduces the burden on the Centre and increases the share of States.
  • Currently under PMFBY:
(1) Farmers pay a fixed share of the premium: 2% of the sum insured for kharif crops, 1.5% for rabi crops and 5% for cash crops.
(2) The Centre and State split the balance of the premium equally.
Source
The Hindu
Posted by Jawwad Kazi on 20th Feb 2020
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