Union Minister for Finance, Arun Jaitley giving final touches to the Union Budget as MoS Finance Jayant Sinha and his full budget team look on at North Block in New Delhi
The government is planning to spend Rs 5,500 crore for the crop insurance scheme that was announced earlier, the Pradhan Mantri Fasal Bima Yojana. In his Budget
speech, Finance Minister Arun Jaitley said that the farmers will have to pay a nominal premium for the coverage.
There will be an uniform premium of 2% needs 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 balance premium will be paid by the government. Read our full coverage on Union Budget 2016
There is no upper limit on government subsidy and even if balance premium is 90%, it will be borne by the government. Insurance executives said that the Modified National Agricultural Insurance Scheme (MNAIS) had high premium rate due to which farmers could not afford it. It is anticipated that there would be clusters that would be formed of districts to implement the scheme. Senior insurance officials said that that the way the clusters are classified will define how the premiums will be fixed.
The use of technology has been mandated in the PM Crop Insurance Scheme unlike the other schemes prior to this.