By TIOL News Service

MUMBAI, MAR 23, 2016: THE Union Finance Minister, Mr Aurn Jaitley, launched the Pradhan Mantri Fasal Bima Yojana and the Unified Package Insurance Scheme in Mumbai yesterday. Following-up his focus on the agriculture sector in the General Budget 2016-17 presented by him in Parliament on 29th February, 2016, Mr Jaitley said “agriculture will have to grow faster for the country to get rid of poverty and push the overall GDP expansion”. He said that agriculture was absolutely critical to the economy.

The Finance Minister said that the revamped insurance scheme being launched by the Government have the potential to reduce distress in the farm sector. He said that they would be rolled-out in a ‘mission mode' from April1, 2016 to cover Kharif crops. The Finance Minister Mr Jaitley said though the country had crop insurance schemes in the past, those were mainly linked to the crop loans and therefore, met with a modest level of success.

“This is a crop insurance scheme with a difference, and the difference is absolutely critical to the Indian farmer” Mr Jaitley said. He added that since the new scheme was dependent on large volume, it would cover much larger risks at a very low premium. The farmers' premium would be 2% for Kharif foodgrains and oilseeds crops and 1.5% for rabi crops. In the event of a crop failure, a farmer will be paid more. The Finance Minister said the Government aims to cover 50 percent of the farmers, mostly those depending upon rain-fed agriculture.

Mr Jaitley said with two successive deficit monsoons behind us, a poor rainfall this year would put the systems to test. He asserted that in that event, the successful implementation of the New Crop Insurance Scheme could become a game changer. He said the entire strength of the Indian banking, insurance and financial system would be mobilized to ensure its success.