CRITICAL ANALYSIS OF PRADHAN MANTRI FASAL BIMA YOJNA

(PMFBY)

A project report submitted in partial fulfilment for the award of the degree of
POST GRADUATE DIPLOMA MANGEMENT IN INSURANCE BUSINESS
MANAGEMENT AT BIMTECH

at

IFFCO Tower II, Plot No. 3, Sector 29, Gurgaon – 122001 (Haryana)

Submitted By

SRISHTI BEDI

Under the Guidance of

Company Mentor: Faculty Mentor

Mr Kunal Soni Prof. K.K. Krishnan
General Manager Chief Mentor CCR

[i]
SUMMER PROJECT CERTFICATE

This is to certify that Srishti Bedi, 17IN652 a student of PGDM-Insurance Business Management
has worked on a summer project titled CRITICAL ANALYSIS OF PRADHAN MANTRI FASAL
BIMA YOGNA after Trimester 3 in partial fulfilment of the requirement for Post Graduate
Diploma in Management programme. This is her original work to the best of my knowledge.

DATE - SIGNATURE

PROF. KK KRISHNAN

CHAIR PERSON (CCR)

[ii]
LETTER OF TRANSMITTAL
Birla Institute of Management Technology
Plot no 5, Knowledge Park II, Institutional Area, Greater Noida (NCR), UP.-201306, India
Date:

Mr. Kunal Soni

General Manager, Rural and Cooperatives Department
IFFCO TOKIO General Insurance
Gurgaon, Haryana

RE: Summer Project Report

Attached herewith is a copy of my summer-project report “Critical Analysis of Pradhan Mantri

Fasal Bima Yojna” for submission to mark the completion of 10-week summer project at your
organization. This report was prepared by me using the best practices and it summarizes the work
performed on the project which is being submitted in partial fulfilment of the requirements for
award of diploma.

I would like to mention that the overall experience with the organization was very good and I
learned how work is carried out in real practice. I feel honoured that I got an opportunity to work
with IFFCO TOKIO General Insurance, a company of great repute

I hope I did justice to the project and added some value to the organization. Suggestions/comments
shall be highly appreciated.

Yours truly,
Srishti Bedi
PGDM IBM (2017-19)
Roll No. 17IN652
BIMTECH

[iii]
LETTER OF AUTHORIZATION

I, Srishti Bedi, a student of Birla Institute of Management Technology (BIMTECH), hereby

declare that I have worked on a project titled “Critical Analysis of Pradhan Mantri Fasal Bima
Yojna” during my summer internship at “IFFCO TOKIO General Insurance”, in partial fulfilment
of the requirement for the Post Graduate Diploma in Management program.

I guarantee/underwrite my research work to be authentic and original to the best of my

knowledge in all respects of the process carried out during the project tenure.

My learning experience at IFFCO TOKIO, under the guidance of Mr. Kunal Soni, Rural and
Cooperatives Department and prof. KK Krishnan, Chairperson, Centre for Corporate Relations has
been truly enriching.

[iv]
ACKNOWLEDGEMENT

My Project work with Rural and Cooperatives department at IFFCO TOKIO General Insurance
has been a great learning curve. My summer training with this company has been an experience
which I will always recall with a sense of Satisfaction and Pride.

I take this opportunity to acknowledge the efforts of the many individuals who helped me make
this project possible. First and foremost, I would like to express my heartfelt appreciation and
gratitude to my Industry Guide and mentor, Mr Kunal Soni Rural and Cooperatives Department.
His vision and execution aimed at creating a structure, definition, and realism around the project
and fostered the ideal environment for me to learn and grow.

I am deeply grateful to Prof. KK Krishnan (Project Guide) for his earnest coordination and
valuable efforts. He constantly encouraged me right from the selection of the project to final
preparation of my project. He has been a constant source of knowledge, information, help and
motivation for me through his depth knowledge and reflections

Lastly, I am also thankful to the team of Rural and Cooperatives Departments.

[v]
 TABLE OF CONTENT

S. No. Particulars Page No.

1. Executive Summary

1.1 Introduction to Problem 1

1.2 Objective

1.3 Important Recommendation

2. Overview of Agriculture in India 2

3. Need for Agriculture Insurance 4

4. Previous Agriculture Insurance Schemes In India 4

5. About Pradhan Mantri Fasal Bima Yojna

5.1 Objective of Scheme

5.2 Benefits of PMFBY 7

5.3 Implementing Agencies

5.4 AIC and other private company

6. Research Methodology 13

7. Literature Review 14

8. Problem Definition 16

9. Scope of Study 17

10. Primary Research 17

11. Conclusion 39

12. Limitations 40

13. Bibliography 41

14 Appendix 42

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15 Questionnaire 43

LIST OF TABLES

Table No. Particulars Page No.

1. Premium rates for different crops under NAIS 6

2. Difference between national agriculture insurance scheme 7

and weather based crop insurance scheme

3. Premium Rates 12

4. Showing No. of respondents interviewed in various 19

districts and the village visited

5. Showing Family Sizes of Respondents 20

6. Showing Occupation of Respondents other than farming 21

7. Showing Annual Income of Respondents 21

8. Showing Type of Crop grown by Respondents 22

9. Showing land Size of Respondents 22

10. Showing Rights of Respondents on their land 22

11. Showing awareness of term Insurance 23

12. Showing awareness of Pradhan Mantri Fasal Bima Yojana 24

13. Showing medium/channel through which respondents got 25

to know about PMFBY

14. Showing awareness about premium rates 27

15. Showing Respondents who have/haven’t taken Insurance 28

under PMFBY

16. Showing reason for taking Insurance 29

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17. Showing were the respondents educated or not before 30
giving insurance

18. Showing whether respondents know/don’t know how to 32

file a claim

19. Showing number of people who had bad experience while 33

settling the claim

20. Showing the mentioned problems faced by respondents 33

21. Showing what respondent think regarding cost of insurance 34

22. Showing the reason for not taking insurance 36

23. Showing whether respondents need insurance or not 37

LIST OF FIGURES

Figure No. Particulars Page No.

1. Contribution of agricultural sector to the GDP since 1980’s 3

2. Showing Sample size taken from each district 20

3. Showing awareness of term Insurance in various 24

districts

4. Showing awareness of Pradhan Mantri Fasal Bima 25

Yojana in Various districts

5. Showing medium/channel through which they got to 26

know about PMFBY in various districts

6. Showing awareness about premium rates 27

7. Showing Respondents who have/haven’t taken 28

Insurance under PMFBY in various districts

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8. Showing reason for taking Insurance in various districts 30

9. Showing were the respondents educated or not before 31

giving insurance

10. Showing whether respondents know/don’t know how to 32

file a claim in various districts.

11. Showing the mentioned problems faced by respondents 34

in various districts

12. Showing what respondents thing regarding cost of 35

insurance in various districts

13. Showing the reason for not taking insurance in various 37

districts

14 Showing whether respondents need insurance or not 38

[ix]
ABOUT THE COMPANY:

Incorporated on 4th December 2000, Iffco Tokio General Insurance (ITGI) company limited has
the vision of being the industry leader by building customer satisfaction through Fairness,
transparency and quick response. It is a joint venture between the Indian Farmers Fertilizer Co-
operative (IFFCO) and its associates and Tokio Marine and Nichido Fire Group, the largest listed
insurance group of Japan. IFFCO Tokio General Insurance has Pan India presence with 84
Strategic Business Units (SBU’s) and a wide network of over 205 Lateral Spread Centres (LSC’s)
and 400 Bima Kendras. It offers a wide range of uniquely customized policies covering a range of
customers i.e. from farmers to some of India's largest automobile manufacturers such as Maruti
Suzuki. From a modest Rs 213 Crores of GWP (Gross Written Premium) in 2001-02 ITGI has
achieved an impressive Rs 5435 Crores in 2016-17, thereby becoming one of India's leading
private players. IFFCO Tokio General Insurance has got the Technical Support for underwriting
and reinsurance from Tokio Marine and on Risk Management from Tokio Risk Consulting (TRC).
It is the first company in India to underwrite mega policies for a fertilizer and an automobile
company. This comprehensive policy is based on international rates and optimizes the premium
outflow for clients even as it offers a one-stop all-risk cover. Other than the conventional products,
it has been able to come out with niche products like Credit Insurance, Fine Arts Insurance, P and
I Insurance, Errors and Omission Policy for the IT Sector etc. At the same time it has steadfastly
carried out its rural centric initiatives by launching products like Sankat Haran Bima Yojana,
Mausam Bima Yojana, Mahila Suraksha Bima Yojana and Janata Bima Yojana for the masses. It's
pioneering work using technology like RFID (Radio Frequency Identification Device) and NDVI
(Normalised Difference Vegetation Index) have made it possible to offer Cattle and Weather
insurance to the rural population at large

[x]
 1. EXECUTIVE SUMMARY

1.1 INTRODUCTION TO PROBLEM

This report involves studying the impact of Pradhan Mantri Fasal Bima Yojana. I concentrated on
small and marginal scale farmers of Haryana to find out the impact of PMFBY on their crop. The
insurance companies and the central government both put in great efforts and resources to develop
any agricultural scheme. It launches various schemes for improvements in irrigation facilities, soil
conditions, milk and other dairy products and crop improvement. The schemes not only provide
the farmers with financial support but also advices them on improving their productivity through
training.

One such scheme launched by central government along with state governments and few private
insurance companies is PRADHAN MANTRI FASAL BIMA YOJANA. The following are the
objectives set by the government to be fulfilled by PMFBY:

1.2 OBJECTIVES

1. To provide insurance coverage and financial support to the farmers in the event of failure
of any of the notified crop as a result of natural calamities, pests & diseases.
2. To stabilise the income of farmers to ensure their continuance in farming.
3. To encourage farmers to adopt innovative and modern agricultural practices.
4. To ensure flow of credit to the agriculture sector.

Keeping in mind these objectives set to be accomplished, we found out how impactful this scheme
is for farmers. How this scheme is different from the previous crop insurance schemes and what
impact does it have on farmers.

The project has been compiled from the data collected from conducting individual interviews of
farmers from 4 different districts of Haryana. We concentrated on the following topics:
 Level of knowledge about the scheme
 How useful is it over the previous schemes

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  What can be done further to bring the farmers to avail benefits from this scheme
 What problems(suggestions) do they have to say

In Haryana only 74.16% of people i.e. 66 out of 89 people had heard about the term insurance and
out of those only 47 people had heard about PMFBY i.e. overall 52.81% heard of PMFBY. The
evolution of PRADHAN MANTRI FASAL BIMA YOJANA is helping farmers across India but
still 50-60% of farmers have no knowledge about the PMFBY scheme. Hence in this project the
major focus is on the study of the impact and awareness of the Pradhan Mantri Fasal Bima Yojana.
In order to understand what impact Pradhan Mantri Fasal Bima has on farmers, a detailed study
was undertaken wherein different articles related to the scheme were studied to find how farmers
are benefiting from this scheme.

1.3 SCOPE OF STUDY

 The project aims at studying how effective is the Pradhan Mantri Fasal Bima Yojana is for the
farmers. It involves knowing how many people are enrolled for the scheme, the reason they are
enrolled, how were they educated about the scheme and how effective is the scheme for them.
 The project also studies the reasons why majority of the farmers are not enrolled and how can
awareness be spread amongst them so that they can derive benefit from the scheme.
 The study would help IFFCO TOKIO General Insurance Company understand the issues the
farmers face regarding the scheme and would work out a module to fill in these loopholes.

1.4 RECOMMENDATIONS

1. Farmers should be properly educated about the PMFBY scheme and claim settlement
process by the banks and insurance companies.
2. Government can organize street plays on PMFBY in the villages for the farmers to
make them aware about the scheme.
3. We can educate the Tehsildar or Area representatives of the villages.
4. Schools in villages can educate the children about the scheme. This way farmers will
get aware about the policy through their children.

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 5. CSC campaign can be conducted.
6. Insurance companies do not promote the scheme in the area where they expect heavy
losses. So, farmers should be aware about the benefits of the scheme.
7. State Government should also encourage farmer's enrolment not only in the election
year but also in non-election years. In Chattisgarh the enrolment increased by 30% in
the election year from previous non-election years.

2. OVERVIEW OF AGRICULTURE IN INDIA

India is a land of farmers where the maximum proportion of rural population depends on
agriculture and allied activities for their livelihood. However, in the recent years, agricultural GDP
share is declining continuously and is about 16% of the country‘s GDP in the year 2017-18. The
share of the industry and the service sector is increasing ever since 1960’s. and currently they
contribute to 24% and 57% respectively.

Figure 1: Contribution of agricultural sector to the GDP since 1980’s

[3]
Agricultural production and farm incomes in India are frequently affected by natural disasters such
as droughts, floods, cyclones, storms, landslides and earthquakes. There are man-made disasters
such as fire, sale of spurious seeds, fertilizers and pesticides, price crashes, etc. All these events
severely affect farmers through loss in production and farm income and are beyond the control of
farmers. This is the primary reason why farmers toil hard to earn a living out of farming and also
feed the rising population of this country.

In India, Agriculture heavily depends on monsoons with 60% of the cropped area being rain-fed.
Given the fact that around 75% of rainfall occurs during June-September period, the fate of the
Kharif crops depends on the Southwest monsoon. Farming community in India, thus, remain at
the mercy of rain-Gods. The distress faced by farmers is clearly evidenced by large number of
farmer’s suicide committed during periods of deficit rainfall. According to the Ministry of
Agriculture, the total of number of suicides committed by farmers for agrarian reasons has
increased in the last decade.

Hence insurance is seen as an alternative method to level down the suffering of these farmers in
case of loss to their production or farm income. Crop insurance is one of the most important
alternatives to manage such type of risks by the farmers.it protects farmers against the probable
variations in their yield, resulting from uncertainty such as rainfall (drought or excess rainfall),
flood, hails, other weather variables like (temperature, sunlight, wind), the pest infestation.

3. NEED FOR AGRICULTURAL INSURANCE

Agriculture has always been associated with uncertainty of events that are beyond the control of
mankind. It becomes very disturbing for farmers to overcome the losses caused by such events.
Hence crop insurance is considered a strong risk mitigation tool.

Agriculture insurance is an alternative to manage risk in yield loss by the farmers. It helps in
stabilization of farm production and income of the farming community. As such it is a risk
management alternative where production risk is transferred to another party at a cost called

[4]
premium. However, the penetration of crop insurance is found to be very less. This study is an
attempt to understand the existing scenario and about the change from its origin till date. For many
years now, a number of complex agriculture insurance schemes had existed. Farmers however
have been unable to avail the benefits of these schemes. In most of the earlier schemes premium
rates has risen drastically in recent years. The Pradhan Mantri Fasal Bima Yojana has now replaced
all other schemes and integrated the benefits in one single scheme.

4. PREVIOUS AGRICULTURAL INSURANCE SCHEMES IN INDIA

1. PILOT CROP INSURANCE SCHEME (PCIS)

A study was commissioned by the general insurance corporation of India (GOI) and entrusted
to Prof. V.M. Dandekar to suggest a suitable approach to be followed in the scheme. The
recommendations of the study were accepted and a Pilot Crop Insurance Scheme was launched
by the GIC in 1979, which was based on “Area Approach” for providing insurance cover
against a decline in crop yield below the threshold level.

The premium paid was shared between the General Insurance Corporation of India and State
Governments in the ratio of 2:1. The premium ranged from 5% to 10% of the total sum insured.
PCIS was implemented in 12 stated by the end of 1984 and covered 6.23 lakh farmers.

2. COMPREHENSIVE CROP INSURANCE SCHEME (CCIS)

This scheme was implemented by Government of India in active participation of the State
Government. It came into effect from April 1985 and was kept optional for the state
governments to participate.

This scheme was an extension of PCIS and was made compulsory for the farmers who had
taken loan from any Financial Institution. The main difference between PCIS and CCIS was
that PCIS was on voluntary basis whereas CCIS was formed on compulsory basis i.e. farmers
with loans were compulsorily covered.

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 CCIS covered total of 763 farmers for a premium of Rs. 404 crores against total claims of Rs.
2303 crores. Amongst these, more than half of the total indemnities (58%) were paid to the
groundnut farmers of Gujarat making a total claim ratio of 20.75 while it was only about 5.72
at the all India level.

3. NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS)

This scheme was introduced by Government of India in the country from Rabi season in
1999-2000. This policy covers the risk during both the crop season i.e. Kharif and Rabi
season. The major objective of this scheme is to provide financial support to the farmers
due to crop failure as a result of drought, cyclone, temperature change or any other factor.
NAIS operated on the bases of:
 Area approach- defined areas for each notified crop for widespread calamities.
 On individual basis- for localised calamities such as hailstorm, landslides, cyclones and floods.

Season Crops Premium rates

1. Kharif Bajra and oilseeds 3.5% of SI or Actuarial rate, whichever is less

Other crops( cereals, 2.5% of SI or Actuarial rate whichever is less
other millets and pulses)
2 Rabi Wheat 1.5% of SI or Actuarial rate whichever is less
Other crops( cereals, 2.0% of SI or Actuarial rate whichever is less
other millets and pulses)
3 Kharif and rabi Annual Commercial/ Actuarial rates
Horticultural Crops
Table 1: Premium rates for different crops under NAIS

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 4. WEATHER BASED CROP INSURANCE SCHEME(WBCIS)
To bring more farmers under the coverage of Crop Insurance, a pilot weather based crop
insurance scheme was launched in 20 states in the year 2007. Weather based crop insurance
aims to mitigate the hardship of the insured farmers against the likelihood of financial loss on
account of anticipated crop loss resulting from incidence of adverse conditions like rainfall,
frost, temperature, humidity.
Some features of the WBCIS were as follows:
 The scheme covered loanee farmers on compulsory basis in notified area and for non-loanee
the scheme was voluntary.
 Private Insurance Companies have been involved for implementation besides the Agricultural
Insurance Company of India (AIC) Limited.
 Actuarial rates of premium are capped at 10 percent during Kharif and 8 percent during for
food crops and oil seeds. For annual, commercial/horticultural crops, cap of 12 percent on
actuarial rates of premium is applicable.

National agricultural insurance scheme Weather based crop insurance scheme

NAIS was based on an individual Basis WBCIS was based on a group basis
approach approach

All risks were covered under NAIS. Only weather related risk were covered
(Drought, excess rainfall, flood, hail, pest under WBCIS. This included frost,
infection.) temperature change, and humidity.

Under NAIS, both the loanee and non- Under WBCIS , both the loanee and non-
loanee farmers were covered loanee farmers were covered

Claims were paid on “yield basis” Claims were paid on “weather basis”

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 Table 2: Difference between national agriculture insurance scheme and weather based
crop insurance scheme

Following the entire above mentioned crop insurance schemes implemented by the Government
of India (GOI) along with Agriculture Insurance Company (AIC) and Financial Institutions and
selected private insurance companies.

5. ABOUT PRADHAN MANTRA FASAL BIMA YOJANA (PMFBY)

This scheme was announced by the union cabinet in January 2016. This scheme is formulated to
help decrease the burden of premium on famers who opt for loan for their cultivation. The scheme
would also safeguard them against the losses they would suffer due to unfavourable weather
conditions. The scheme will be administered under the Ministry of Agriculture and Farmers
welfare, GOI.

PMFBY will substitute/replace the surviving two crop insurance schemes (NAIS) National
Agricultural Insurance Scheme and (MNAIS) Modified National Agricultural Insurance Scheme.
The new scheme came into force from the Kharif season i.e. from June.

In 2016-17 crop year, about 26.28 per cent or 51.1 million hectare of gross area under crops was
insured. In first year of the implementation of the PMFBY, a substantial progress has been
achieved. In 2017-18, the target for insured area is set at 40 per cent gross cropped area, which
translates to 77.6 million hectare

For this scheme a tag line of “Minimum Premium, Maximum Insurance for Farmers Welfare” is
given by the government. That means farmers shall derive maximum benefits by paying minimal
premium.

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 5.1 OBJECTIVE OF THE SCHEME

 To provide insurance coverage and financial support to the farmers in the event of failure of any
of the notified crop as a result of natural calamities, pests & diseases.
 To stabilise the income of farmers to ensure their continuance in farming.
 To encourage farmers to adopt innovative and modern agricultural practices.
 To ensure flow of credit to the agriculture sector.

5.2 BENEFITS OF PRADHAN MANTRI FASAL BIMA YOJANA

 Since PMFBY is a replacement of national agricultural insurance scheme (NAIS), it is exempted

from the service tax.
 This scheme will be handled under a single insurance company, Agriculture Insurance Company
of India (AIC)
 Allocation of the scheme presented in budget 2017- 2018 is Rs. 9,000 cores. Government
contributes 5 times of the farmer’s contribution.

5.3 IMPLEMENTING AGENCY (IA)

Implemented by multiple insurance companies but under overall control of Ministry of Agriculture
& Farmers Welfare the Ministry empanelled Agriculture Insurance Company of India (AIC) and
some private insurance companies to participate in the Government. Agencies include various
Financial Institutions like Commercial Banks, Co-operative Banks, Regional Rural Banks and
their regulatory bodies and Government Departments like Agriculture, Co-operation, Horticulture,
Statistics, Revenue, Information/Science & Technology, and Panchayati Raj etc.

5.4 AIC AND OTHER PRIVATE COMPANIES

The Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW) has empanelled
Agricultural Insurance Company of India (AIC) and some private Insurance companies to

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participate in PMFBY based on their Financial Strength, Manpower and Expertise. The
empanelled private insurance companies at present are:

 ICICI-Lombard General Insurance Company Ltd.

 HDFC-ERGO General Insurance Company Ltd.
 IFFCO-Tokio General Insurance Company Ltd.
 Cholamandalam MS General Insurance Company Ltd.
 Bajaj Allianz General Insurance Company Ltd.
 Reliance General Insurance Company Ltd.
 Future Generali India Insurance Company Ltd.
 Tata-AIG General Insurance Company Ltd.
 SBI General Insurance Company Ltd.
 Universal Sompo General Insurance Company Ltd

Selection of IA shall be done from amongst the designated / empanelled companies which shall be
initially pre-qualified, strictly on the basis of, experience, existence of infrastructure in the area
and quality of services like coverage of farmers & area, pay-outs in terms of quantum & timely
settlement thereof, willingness to do publicity & awareness campaigns etc.

5.5 UNIT OF INSURANCE

The scheme is implemented on an “area approach” basis. Under this, defined Areas for each
notified crop for widespread calamities are fixed with the assumption that all the insured farmers,
in a Unit of Insurance, to be defined as ‘Notified Area’ for a crop, face similar risk exposures,
incur to a large extent, identical cost of production per hectare, earn comparable farm income per
hectare, and experience similar extent of crop loss due to the operation of an insured peril, in the
notified area.

5.6 CROPS AND NOTIFIED AREA

Crops:

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The Scheme can cover all the Crops for which past yield data is available and grown during the
notified season, in a Notified Area and for which yield estimation at the Notified Area level will
be available based on requisite number of Crop Cutting Experiments (CCEs) being a part of the
General Crop Estimation Survey (GCES).
Notified areas:
Notified Area is the Unit of Insurance decided by the State Govt. for notifying a Crop during a
season. The size of the Unit of Insurance shall depend on the area under cultivation within the unit.
For major crops, the Unit of Insurance shall ordinarily be Village/Village Panchayat level and for
minor crops may be at a higher level so that the requisite number of CCEs could be conducted
during the notified crop season. States may notify Village / Village Panchayat as insurance unit in
case of minor crops too if they so desire.

5.7 FARMERS TO BE COVERED

All farmers growing the notified crop in the notified area during the season who have insurable
interest in the crop are eligible. The PMFBY offers both compulsory coverage and voluntary
coverage.

Compulsory coverage:
 Farmers in the notified area who possess a Crop Loan account/KCC account (called as Loanee
Farmers) to whom credit limit is sanctioned/renewed for the notified crop during the crop
season.
 Such other farmers whom the Government may decide to include from time to time.
Voluntary coverage:
 The non-loanee farmers who have not borrowed from any financial institution.

5.8 RISKS TO BE COVERED

Following risks leading to crop loss are to be covered under the scheme:-
 Yield losses (standing crops on notified area basis)
 Prevented sowing ( on notified area basis)
 Post-harvest losses (individual area basis)
 Localised calamities (individual farm basis)

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5.9 EXCLUSIONS
Losses arising out of the following perils shall be excluded:
 War & kindred perils
 nuclear risks,
 riots, malicious damage,
 theft, act of enmity,
 grazed and/or destroyed by domestic and/or wild animals,
 In case of Post–Harvest losses the harvested crop bundled and heaped at a place before
threshing, other preventable risks.

5.10 PREMIUM RATES

Maximum insurance charges

S.NO. season Crops payable by farmer (% of Sum

Insured)

1. Kharif Food & Oilseeds crops (all 2.0% of SI or Actuarial rate,

cereals, millets, & oilseeds, whichever is less
pulses)
2. Rabi Food & Oilseeds crops (all 1.5% of SI or Actuarial rate,
cereals, millets, & oilseeds, whichever is less
pulses)
3. Kharif and Annual Commercial / 5% of SI or Actuarial rate,
rabi Annual Horticultural crops whichever is less

Table 3: Premium Rates

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5.11 SUM INSURED/LIMIT OF COVERAGE

SUM INSURED/ LIMIT OF

COVERAGE

FOR LOANEE FARMERS FOR NON-LOANEE FARMERS

 The Sum Insured would be  For farmers covered on

equal to Scale of Finance for
that crop as fixed by District
Level Technical Committee
(DLTC) which may extend up
to the value of the threshold
yield of the insured crop at
the option of insured farmer.
voluntary basis the sum-
insured is up to the value of
Threshold yield i.e. Threshold
yield x (MSP or gate price) of
the insured crop.


Where value of the threshold
yield is lower than the Scale of
Finance, higher amount shall
be the Sum Insured.
5.12 SHARING OF RISK

The risk is shared between Implementing agency and Government as follows:

The liability of the Insurance companies in case of catastrophic losses computed at the National
level for an agricultural crop season shall be up to 350% of total premium collected (farmer share
plus Govt. subsidy) or 35% of total Sum Insured (SI), of all the Insurance Companies combined,
whichever is higher. The losses at the National level in a crop season beyond this ceiling shall be
met by equal contribution (i.e. on 50:50 bases) from the Central Government and the concerned
State Governments.

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 6. METHODOLOGY ADOPTED

The methodology adopted to conduct this research across 4 districts was a difficult task. It involved
both secondary research and primary research. With the help of the secondary data, it became
easier for us to understand what exactly the Pradhan Mantri Fasal Bima Yojana had to offer to the
farmers. It also helped us know what problems the farmers face with the schemes which helped us
prepared a blueprint on what should be asked to the farmers to get accurate information about the
scheme from them.

SECONDARY RESEARCH:
It includes finding about the scheme from various governmental and statistical websites. I got the
following information from these websites:
 How PMFBY was different from the schemes that previously existed.
 How rates of premium being charged in PMFBY vary from previous scheme
 What were the problems faced by the farmers that were reported to the companies
 Percentage increase in the number of enrolment of farmers under this scheme.

PRIMARY RESEARCH:

1. Deciding the sample size: the first step of primary research was to decide our sample size.
The sample size taken for our research is 89 respondents from 4 districts namely Gurugram,
Faridabad, Rohtak, Sonipat.

2. Questionnaire design: this was a very crucial part of the research as it would reflect the
purpose of our research. The questions we had in our questionnaire were both open and
close ended. The questions were prepared in English that were translated in Hindi.

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RESEARCH DESIGN:

The research design adopted includes both ‘exploratory’ and ‘descriptive’ research. Both were
used to get a broader prospective of the research.
1. Exploratory: this consisted of going through the secondary data and various research
papers that were published on topics related to the PMFBY and other crop insurance
schemes.

2. Descriptive: this consisted of the primary data we collected through personal-interviews

with the farmers who were either loanees or non-loanees.

7. LITERATURE REVIEW

Manoj Siwach , A Critical Analysis of existing crop insurance scheme in the light of PMFBY
With Special Reference of Haryana - Indian agriculture has turned out to be synonymous with
hazard and uncertainty on the ground that near about 90% of the variations in production are
brought by changes in natural factors i.e. flood, drought and adverse weather conditions, etc. The
low productivity, less income and large amount of loans taken by farmers for agriculture are
compelling some of our agriculturists to commit suicide. The Government of India introduced
new crop insurance scheme i. e. Pardhan Mantri Fasal Bima Yojana (PMFBY) with the help of
Agricultural Insurance Companies to protect farmers from agricultural irregularity in production
caused by natural disasters, pests or diseases. The present paper highlights the advancement of all
existing crop insurance policies in the light of PMFBY at national level and with special reference
to state of Haryana. It reveals that only 4% of the rabi crop and 11% of the risk-prone kharif crop
holding are insured so far (Mahto, 2016). NCIP has an anticipated focus of 50% coverage of
farmers by the terminal year of 12th Plan (i. e. 2016-17). The Government of India has made
necessary improvement in the segment of plans of MNAIS, WBCIS and CPIS of agricultural
insurance. The Government must devote more resources (money, manpower and time) to design
the insurance products best suited to farmers according to the distinct agro-environmental regions
rather than following one-size-fits - all strategy.

[15]
Cariappa, A. G. Adeeth; 2017, Progress of Crop Insurance and Pradhan Mantri Fasal Bima
Yojana in India. - This paper makes a comparative assessment of the performance of the Pradhan
Mantri Fasal Bima Yojna (PMFBY) (an area-based crop yield insurance) and the previous crop
insurance schemes in terms of their coverage, financial performance and operational efficiency in
providing a safety net to the farmers when they experience crop loss. The paper showcases the
evolution of crop insurance schemes in the country. Using time series secondary data, the study
has revealed that PMFBY performs better than the existing National Agricultural Insurance
Scheme (NAIS) in terms of higher adoption rate, higher percentage of farmers benefited and higher
percentage of non-loanee farmers enrolment.

Arun Surendran, Enhancing Technology Use; Agriculture Insurance 2017 - Pradhan Mantri
Fasal Bima Yojana (PMFBY) is a flagship scheme of the Government of India to provide insurance
coverage and financial support to farmers in the event of failure of any of the notified crops,
unsown area and damage to harvest produce as a result of natural calamities, pests and diseases to
stabilise the income of farmers, and to encourage them to adopt modern agricultural practices. The
scheme is a considerable improvement over all previous insurance schemes in India and is heavily
subsidised by the state and central governments. The scheme aims to cover 50 percent of the
farming households within next 3 years. During its implementation in the last one season, several
challenges relating to enrolment, yield estimation, loss assessment, and claim settlement were
reported by farmers, insurance companies as well as the state governments. It was also noted that
several technological opportunities existed for possibly leveraging support to the Indian crop
insurance program for enhanced efficiency and effectiveness. NITI Aayog of the Government of
India, therefore, constituted a Task Force to deliberate on this subject and identify such potential
opportunities.

Prof. J.P. Yadav, AGRICULTURE INSURANCE IN INDIA: REACHING THE

UNREACHED - Universally agriculture is perceived to be synonymous with risk and uncertainty.
The large number of farmer suicides in India over crop failure has been the most disturbing,
distressing and scary trend to emerge from the rural surroundings in the last few years. In a country
of our size where farmers toil hard to feed a population of 1.25 billion, it is rather ironical that their

[16]
deaths were reduced to mere statistics and numbers. Agriculture insurance is an alternative to
manage risk in yield loss by the farmers. It helps in stabilization of farm production and income
of the farming community. As such it is a risk management alternative where production risk is
transferred to another party at a cost called premium. However, the penetration of crop insurance
is found to be very less. This study is an attempt to understand the existing scenario and about the
change from its origin till date. For many years now, a number of complex agriculture insurance
schemes had existed. Farmers however have been unable to avail the benefits of these schemes. In
most of the earlier schemes premium rates has risen drastically in recent years. The Pradhan Mantri
Fasal Bima Yojana has now replaced all other schemes and integrated the benefits in one single
scheme. The government has decided to get rid of the „capping‟ mechanism that did not allow
farmers to derive legitimate benefits previously. The drastic reduction in premium is likely to result
in an increase of burden to centre about 500 percent. This means that the farmers shall derive
“MAXIMUM BENEFITS by paying MINIMAL PREMIUM”. The PMFBY will be applicable
from the Kharif season of 2016.

8. PROBLEM DEFINITION

Crop insurance is purchased by agricultural producers, including farmers, ranchers, and others to
protect themselves against either the loss of their crops due to natural disasters, such as hailstorm,
drought, and floods, or the loss of revenue due to declines in the prices of agricultural commodities.
In India, the agricultural production is dependent on the nature. The Indian farmers have to suffer
a huge loss during natural disasters such as flood, drought or earthquake. Therefore, insurance is
one of the best ways to protect the farmers from such damages. Crop insurance helps in
stabilization of farm production and income of the farming community. The total Crop Insurance
premium in the year 2014- 15 is the order of about Rupees 22,337 crores and the Sum Insured is
the order of Rupees 2,02,551 crores. This study mainly focuses on how many farmers in the rural
regions of India are aware of Pradhan Mantri Fasal Bima Yojana and how more awareness can be
spread about this scheme to them.

The main issues hence focused in this paper are:

 Social and economic status of rural people

[17]
  There enrolment in Pradhan Mantri Fasal Bima Yojana
 Their awareness about the scheme
 How can further awareness be spread

9. SCOPE OF STUDY
 The project aims at studying how effective is the Pradhan Mantri Fasal Bima Yojana is for the
farmers. It involves knowing how many people are enrolled for the scheme, the reason they are
enrolled, how were they educated about the scheme and how effective is the scheme for them.
 The project also studies the reasons why majority of the farmers are not enrolled and how can
awareness be spread amongst them so that they can derive benefit from the scheme.
 The study would help IFFCO TOKIO General Insurance Company understand the issues the
farmers face regarding the scheme and would work out a module to fill in these loopholes.

10.PRIMARY RESEARCH

Primary research for this project is concerned with interaction with villagers of Haryana. This
report is based on the experiences and observations in Gurugram, Faridabad, Rohtak and Sonipat
district of Haryana. The method as mentioned above followed in this research is descriptive
research technique. Personal interview and Focus Group discussion were the methods used in the
research while interacting with the villagers.

1. Designing Questionnaire:
A mixture of Dichotomous, Multiple Choice, Demographic and open ended questions were designed
to study the impacts of Pradhan Mantri Fasal Bima Yojana. The test unit includes all those
farmers who have agricultural land whether owned or rented and is engaged in agricultural
practices
Deciding the sample size:
The sampling technique used in this research is non random sampling. Respondents were
selected on the basic of availability of agricultural land in the village.

[18]
 District Village Respondents

Gurugram Gurugram 6

Sohna 4

Palaudi 5

Faruknagar 4

Faridabad Faridabad 9

Ballagarh 6

Mirzapur 8

Rohtak Rohtak 3

Kalanour 2

Meham 8

Bhanu 9

Sonipat Sonipat 7

Rai 5

Gohana 4

Khathura 9

Table 4: Showing No. of respondents interviewed in various districts and the village visited.

[19]
 Sample Size (District Wize)
30

25

20

15

10

0
Gurugram Faridabhad Rothak Sonipat

Figure 2: Showing Sample size taken from each district

Data Analysis

Please Note:
 All incomes are in Rupees.
 Land area mentioned throughout the report is in Bigha.

Introduction to Sample:

People who were involved in Personal interview and Focus Group discussion had following
characteristics.

Family Size:

Family Size Frequency Share in Sample

2 3 3%

[20]
 3 8 9%

4 10 11%

5 20 22%

6 20 22%

7 8 9%

More than 7 20 22%

Table 5: Showing Family Sizes of Respondents

Occupation other than farming:

Occupation Frequency Share in Sample

Animal Husbandry 27 30%

Job at someone’s land/ 13 15%

business

Own Business 13 15%

None 36 40%

Table 6: Showing Occupation of Respondents other than farming

Annual Income from Farming:

Income Scale Frequency Share in Sample

Less than 100001 24 27%

100001-200000 36 40%

200001-300000 12 13%

[21]
 300001-400000 6 7%

More than 400000 11 12%

Table 7: Showing Annual Income of Respondents

Crop Grown by Farmers:

Crop Type Frequency Share in Sample

Both – Rabi & Kharif 60 67%

Kharif Only 19 22%

Rabi Only 10 11%

Table 8: Showing Type of Crop grown by Respondents

Land Size:

Land Size Frequency Share in Sample

1-10 Bigha 47 53%

11-20 Bigha 21 24%

21-30 Bigha 9 10%

31-40 Bigha 4 4%

More than 40 Bigha 8 9%

Table 9: Showing land Size of Respondents

Rights over Agricultural Land:

Rights Frequency Share in Sample

Owner 74 83%

[22]
 Tenant 15 17%

Table 10: Showing Rights of Respondents on their land

Interpretation:

 Average Family size is 6 people.

 60% people have income from farming as well as other occupation(Animal husbandry, job at
someone’s business and owing a business) while other 40% are only farmers.
 40% people have their annual income ranging 1,00,001 to 2,00,000 while other 60% fall in
different income range.
 67% people do farming in both seasons i.e. Rabi & Kharif while 22% in Kharif season only
and 11% in Rabi only.
 53% people have their land size ranging 0-10 bigha while other 47% have different land sizes.
 83% people were owner of their land while 17% were tenants.

Awareness regarding Insurance

Were they aware of term Insurance or ever heard about it?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 8 40% 21 92% 18 82% 19 74% 66 74.16%

No 11 60% 2 8% 4 18% 6 26% 23 25.84%

Table 11: Showing awareness of term Insurance

[23]
 25

20

15
Yes

10 No

0
Sonipat Faridabad Rothak Gurugram

Figure 3: Showing awareness of term Insurance in various districts

Sonipat had the least number of respondents who had heard about the term ‘insurance’. About 60%
of the respondents in Sonipat were not aware of what insurance is. On the contrary, Faridabad had
the highest number of respondents who knew what insurance is and how is it beneficial for people.
Only 8% of the population was unaware what insurance is in Faridabad. Following Gurugram,
Rohtak also had 80% of the respondents who knew about the term ‘Insurance’. Considering the 4
districts, the overall knowledge about what exactly insurance is was 74.16%. Still 25.84% was
the sample respondents were not aware of what insurance is.

Were they aware of Pradhan Mantri Fasal Bima Yojana started by Govt. of India?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 6 30% 10 42% 14 62% 17 68% 47 52.81%

No 13 70% 13 58% 8 38% 8 32% 42 47.19%

Table 12: Showing awareness of Pradhan Mantri Fasal Bima Yojana

[24]
 18

16

14

12

10
Yes
8 No

0
Sonipat Faridabhad Rothak Gurugram

Figure 4: Showing awareness of Pradhan Mantri Fasal Bima Yojana in Various districts

When asked if the respondents had ever heard about PMFBY. Gurugram had the highest
percentage of respondents who had heard about the scheme. Rohtak and Faridabad had 62% and
42% of their respondents who had heard about the scheme. Sonipat had only 30% respondents
who had heard about scheme. Overall, 52.81% of the respondents had heard about the scheme,
whereas 47.19% had never heard about the scheme.

If they heard of Pradhan Mantri Fasal Bima Yojana then through which of the following
medium/channel they came to know about it?

Medium Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Newspaper 2 33.33% 4 40% - - - - 6 12.77%

TV 2 33.33% 3 30% 7 50% 10 59% 22 46.81%

[25]
 Bank/Bank 2 33.33% - - 1 7% - - 3 6.38%
officials

Sehkari - - 2 20% - - - - 2 4.26%

Mandali

Deduction - - - - 4 29% 7 41% 11 25.40%

from bank
account

Other - - 1 10% 2 14% - - 3 6.38%

Table 13: Showing medium/channel through which respondents got to know about PMFBY

12

10

8 Newspaper
Tv

6 Bank/Bank officials
Sehkari Mandali

4 Bank Deuction
Other
2

0
Sonipat Faridabad Rothak Gurugram

Figure 5: Showing medium/channel through which they got to know about PMFBY in
various districts

When the respondents who had heard about the scheme were asked the medium through which
they got to know about the scheme, T.V. was found to be the major medium of awareness. About
46.81% of the respondents got to know about the scheme through T.V. 25.40% of the respondents
[26]
came to know about the scheme when premium amount was deducted from their bank account.
Newspaper also helped people to know about the scheme. Hence it can be interpreted that in order
to spread awareness about the scheme, television can be the medium to bring more awareness
amongst the respondents.

Were they aware of premium rates for Kharif, Rabi and Cotton & Horticulture are 2%, 1.5% and
5% respectively?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 2 33.33% 3 30% 6 42.85% 10 58.82% 21 44.68%

No 4 66.67% 7 70% 8 57.15% 7 41.18% 26 55.32%

Table 14: Showing awareness about premium rates

12

10

0
Sonipat Faridabad Rothak Gurugram

Yes No

Figure 6: Showing awareness about premium rates

[27]
When the respondents who had heard about the scheme were asked whether they know that the
premium rates for Rabi, Khariff, and Horiticulture & cotton are 1.5%, 2%, and 5% respectively
only 21 people out of 47 i.e. 44.68% people knew about this. In Gurugram 58.82% of people knew
about this where as in Sonipat and Faridabad 33.33% and 30% respectively people knew about
this.

They have ever taken Insurance under PMFBY?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 4 66.67% 6 60% 7 50% 10 58.82% 27 57.45%

No 2 33.33% 4 40% 7 50% 7 41.18% 20 42.55%

Table 15: Showing Respondents who have/haven’t taken Insurance under PMFBY

12

10

6 Yes
No

0
Sonipat Faridabad Rothak Gurugram

[28]
Figure 7: Showing Respondents who have/haven’t taken Insurance under PMFBY in various
districts

Only 57.45% of the respondents we interviewed were enrolled under Pradhan Mantri Fasal Bima
Yojana. Gurugram had the highest respondents who were enrolled under the scheme. Faridabad
and Rohtak also had 60% and 50% respondents respectively who were enrolled under the scheme.
But Sonipat had low percentage of enrolments under Pradhan Mantri Fasal Bima Yojana.

**There were also respondents who were enrolled under the scheme but were not aware. We got
to know this when some of the respondents showed us their bank passbooks. Hence the above
mentioned percentage might be inaccurate since the respondents were not aware if they were
enrolled under the scheme or not.

i) Respondent who said yes

A. What was the main reason for taking Insurance?

Reason Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Compulsory– 2 50% 4 66.66% 4 57.14% 4 40% 14 51.85%

Taken loan

Security 2 50% 2 33.34% 3 42.86% 6 60% 13 48.15%

Table 16: Showing reason for taking Insurance

[29]
 7

4
Compulsory - Taken Loan
3 Security

0
Sonipat Faridabad Rothak Gurugram

Figure 8: Showing reason for taking Insurance in various districts

The main reason why respondents who had bought insurance under Pradhan Mantri Fasal Bima
Yojana was because it was made compulsory for farmers who had taken loan from any financial
Institutions to buy Pradhan mantra fasal bima yojana. 51.85% of the respondent’s main reason to
be enrolled was because of compulsion.

The remaining 48.15% had bought Pradhan mantra fasal bima yojana as a security. They had
enrolled themselves so that in the event of loss, insurance would financially help them.

B. Were they educated before giving Insurance?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 2 50% 2 33.33% 2 28.57% 3 30% 9 33.33%

No 2 50% 4 66.67% 5 71.45% 7 70% 18 66.67%

Table 17: Showing were the respondents educated or not before giving insurance

[30]
 8

4 Yes
No
3

0
Sonipat Faridabad Rothak Gurugram

Figure 9: Showing were the respondents educated or not before giving insurance

66.67% of the respondents were not properly informed about the scheme before they got enrolled.
Sonipat was the least informed district. But in Gurugram, Faridabad, and Rohtak people were given
information about the scheme before Pradhan mantra fasal bima was sold to them.

The information the respondents ought to know about the scheme are the rates of premium, what
crops are covered, what are the situations under which the insurance company would not pay the
claims, within how many days should the respondent inform about the loss.

It is important to impart such knowledge to the people. But in our research we found out that
66.67% of the respondents were not informed. Hence this proves be to loophole in the scheme.

**When asked whether they have suffered a loss, Maximum answered yes.

C. Did they know the process of filing claim?

[31]
 Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 1 25% 1 16.67% 2 28.57% 6 60% 6 37.04%

No 3 75% 5 83.33% 5 71.43% 4 40% 21 62.96%

Table 18: Showing whether respondents know/don’t know how to file a claim

4
Yes
3 No

0
Sonipat Faridabad Rothak Gurugram

Figure 10: Showing whether respondents know/don’t know how to file a claim in various
districts.

When asked whether they know the process of filing a claim, only 37.04% people know how to
file a claim rest 62.96% don’t know about it. 75% in Sonipat and 83.33% in Faridabad people
don’t know how to file a claim while in Gurugram only people who have taken insurance know
the process of filing claim.

D. Did you had a bad experience in settling the claims?

[32]
 Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 3 75% 4 66.66% 3 42.86% 5 50% 15 55.56%

No 1 25% 2 33.34% 4 57.14% 5 50% 12 44.44%

Table 19: Showing number of people who had bad experience while settling the claim

E. If they have ever suffered a loss, was there any mentioned situation faced by them?

Situation Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Claim not - - 2 50% - - 1 20% 3 20%

settled on
time

Claim - - 2 50% 1 33.33 1 20% 4 26.67%

Denied %

Not - - - - 2 66.67 - - 2 13.33%

Intimated %
Insurer

Not 3 100% - - - - - - 3 20%

Intimated
Insurer on
time

[33]
 None of the - - - - - - 3 60% 3 20%
above

Table 20: Showing the mentioned problems faced by respondents

3.5

2.5
Claim not settled on time
2 Claim Denied
Not Intimated Insurer
1.5
Not Intimated insurer on time
1 None of the above

0.5

0
Sonipat Faridabad Rothak Gurugram

Figure 11: Showing the mentioned problems faced by respondents in various districts

Respondents face many issues when they file a claim with the insurer. There claims are sometimes
paid and sometimes denied. 13.33% of the respondents did not inform the bank when loss occurred.
People in Rohtak did not know that they even had to inform the bank when loss occurred. This
was because they were not given any knowledge about the process.

26.67% respondents told that their claim was denied as the insurer told them that they would only
be paid if whole village faced that same loss. If an individual faced a loss they were not paid.

What do they think about the cost of Insurance?

Cost Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

[34]
 Low - - 1 16.67% - - 2 20% 3 11.11%

Affordable - - 3 50% 3 50% 6 60% 12 44.44%

High 3 75% 2 33.33% 2 25% 2 20% 9 33.33%

Very High - - - - 2 25% - - 2 7.41%

Unaffordable 1 25% - - - - - 11% 1 3.70%

Table 21: Showing what respondent think regarding cost of insurance

5
Low
4 Affordable
High
3
Very High

2 Unaffordable

0
Sonipat Faridabad Rothak Gurugram

Figure 12: Showing what respondents thing regarding cost of insurance in various districts

As the rate of premium in PMFBY varies from 1.5% to 5%, respondents were asked what they
thing about the cost of insurance if they have to pay a premium of 1.5% to 5% on the sum insured.
33.33% people think the cost of insuring crops under PMFBY is high followed by 44.44% people
who said it’s affordable. While 60% respondents of Gurugram think its affordable followed by
Faridabad and Rohtak where 50% people thinks the same. 75% of people of Sonipat thinks the
cost is high.

[35]
ii) Respondent who said no

A. What was the main reason for not taking insurance?

Situation Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Haven’t - - 1 25% 1 14.29 3 42.86 5 25%

taken loan- %
not
compulsory

Lack of - - 1 25% 1 14.29 2 128.57 4 20%

documents % %

Don’t know 2 100% 2 50% 2 28.57 2 28.57 8 40%

where and % %
how to buy

Past - - - - - - - - - -
exp/word of
mouth

Not aware - - - - 3 42.86 4 40% 3 15%

%

Table 22: Showing the reason for not taking insurance

[36]
 3.5
Haven't taken loan - not
3 compulsory
Lack of Documents
2.5

2 Don't know where & how to buy

1.5 Past exp/word of mouth

1
Not aware
0.5
Other
0
Sonipat Faridabad Rothak Gurugram

Figure 13: Showing the reason for not taking insurance in various districts

40% respondents said that they were not enrolled since they did not know where and how to buy
insurance. 25% respondents said that they haven’t taken any loan so it was not compulsory for
them to take insurance.

The main reason is that they are not aware about the scheme. Hence there is a need to bring
awareness about the scheme so that people are fully aware about what the scheme is about and the
process of buying the scheme.

B. Now that you have full knowledge about the policy, would you go for this scheme?

Answer Sonipat Faridabad Rohtak Gurugram Overall

F % F % F % F % F %

Yes 12 80% 10 58.82% 10 66.67% 14 93.33% 46 74.19%

No 13 20% 7 41.7% 5 33.34 1 6.67% 16 25.85%

Table 23: Showing whether respondents need insurance or not

[37]
 16

14

12

10

8 Yes
No
6

0
Sonipat Faridabad Rothak Gurugram

Figure 14: Showing whether respondents need insurance or not

74.19% of the respondents said they need insurance and if given proper knowledge about the
scheme, they would buy the insurance. Every one of the respondents faces a loss on their
agricultural land and hence they need a tool to compensate for these losses. Hence they are all
willing to buy insurance if given proper information about what the scheme is and how it works.

[38]
 11.CONCLUSION

 Only 74.16% of people i.e. 66 out of 89 people heard of term Insurance. Out of those 66 only
47 have heard of PMFBY i.e. overall 52.81% heard of PMFBY.

 Television (46.81%) is the major medium through which they got to know about PMFBY
followed by deduction (debit) of premium from their bank account (25.4%).

 51.85% of the people have taken insurance under PMFBY and the main reason for taking
insurance is that they have taken loan from bank hence it was compulsory for them to take
insurance.

 66.67% of people said that they were not educated before giving insurance.

 77.78% of people don’t know the process of filing a claim in case of loss.

 13.33% of people did not get claim due the reason that they did not intimated insurer about
the loss followed by the reason that the claim was denied (20%) due to they were not intimated
by the insurers.

 Major reason due to which 40% of people did not take insurance is that they were not aware
about where and how to buy the scheme PMFBY.

 After explaining the benefits of PMFBY to the people 74.19% of people i.e. 46 out of 66 said
they need insurance.

 33.33% of the people think that the cost of buying insurance under PMFBY is high followed
by 44.44% people who think that they can afford to buy it.

[39]
 12.LIMITATIONS

Every research work is bound to be performed under certain inextricable limitations. These
limitations are found because of some external and some inherent factors. This study has been
conducted with utmost consideration to adequacy of data and quality of information, but still the
probability of some lacunae cannot be ruled out. Following are the caveats of the study:

 People were reluctant to answer the questions as they thought if they give the accurate
figure it will create a problem for them.
 Limited time period.
 Some of the respondents could not give proper responses due to lack of time as the no. of
questions were too much.
 Language barriers were there, people were not able to understand even the easiest words
like student, question, survey etc.

[40]
13.BIBLIOGRAPHY

1. http://agri-insurance.gov.in/Login.aspx

2. http://www.aicofindia.com/AICEng/Pages/PMFBY-OPERATIONAL-GUIDELINES.aspx

3. http://www.ncap.res.in/upload_files/others/oth_15.pdf

4. http://www.farmer.gov.in/State.aspx?SCode=04

5. http://www.socialresearchfoundation.com/upoadreserchpapers/5/103/1605210931281st%20y
ayati%20nayak.pdf

6. http://ijirc.com/upload/8a967c2685d118d90c9d981f0b1014ee.pdf

[41]
14.APPENDIX

[42]
15.QUESTIONNAIRE
1. What is your annual income?
o Less than 100000
o 100001-200000
o 200001-300000
o 300001-400000
o More than 400001
2. How many members are there in your family?
o 2
o 3
o 4
o 5
o 6
o 7
o More than 7
3. How many earning member are there in your family?
o 1
o 2
o 3
o 4
o More
4. Is your spouse working?
o Yes
o No
5. How many dependent members are there in your family?
o 1
o 2
o 3
o 4
o 5
o 6

[43]
 o More than 6
6. Do you have occupation other than farming?
o Animal Husbandry
o Job at someone’s land/ business
o Own Business
o None
7. Have you ever taken a loan?
o Yes
o No
8. If yes, what was the main reason for taking loan?
o Agriculture
o Home
o Education
o Personal
o Others
9. Were you aware of the term Insurance or ever heard about it?
o Yes
o No
10. Are you aware of Pradhan Mantri Fasal Bima Yojna started by Central Govt. of India?
o Yes
o No

11. If yes, how did you came to know about this scheme?
o Newspaper
o NGO's
o Village Tehsildar
o Radio
o Others………………………………………………………………………………………
…..

12. In which below mentioned category does your farm size falls?

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o Small
o Medium
o Large
o Others
13. Which type of crop is grown by you?
o Both Rabi & Kharif
o Kharif
o Rabi

i. If Rabi then which Rabi crop? (If both fill part ii also)
o Wheat
o Rapeseed & Mustard
o Gram
o Cumin
o Fennel
o Isabgul
o Garlic
o Bajra
o Groundnut
o Other (please mention)………………………….

ii. If Kharif then which kharif crop?

o Paddy
o Cotton
o Jowar
o Ragi
o Tur
o Moong
o Math
o Udad
o Groundnut

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 o Sesame
o Maize
o Castor
o Bajra
o Other (please mention)………………………….
14. Are you aware that premium for Kharif, Rabi and Cotton & Horticulture are 2%, 1.5% and
5% respectively?
o Yes
o No

15. Have you ever taken insurance for your crops under this scheme?
o Yes
o No

i. If yes,
A) What was the main reason due to which you took insurance?
o You were a loanee farmer hence it was compulsory for you
o To secure yourself against the uncertainty
o Any other reason………………………………………………………………………..

B) Were you aware of process of buying insurance under this scheme?

o Yes
o No

C) Did you face any below mentioned problem(s) while buying Insurance under this
scheme?
o Payment
o Documentation
o Not understanding terms & conditions
o Any other
problem………………………………………………………………………….

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D) Were you educated about the terms & conditions before giving insurance?
o Yes
o No
E) Did you the process of filling claim?
o Yes
o No
F) If you have ever suffered a loss and filed a claim what were the problem(s) you faced
after filing a claim?
o Claim amount not received on time
o Company denied for settling claim as crop was not covered under the scheme
o Company denied for settling claim as intimation note made on time
o Any other problem
faced……………………………………………………………………….
o No problem

G) How you received the claim amount?

o Cheque
o DD
o Direct Bank transfer

H) If payment was received direct into bank account, when did you open that bank
account?
o It exists before the claim was filed
o It was opened specially for receiving the claim amount

ii. If no, what was the main reason due to which you did not took insurance?
o You were not a loanee farmer hence it was not compulsory for you
o Lack of documentation
o Don’t know where and how to buy
o You had enough capacity to retain the risk

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 o Any other reason………………………………………………………………………..
16. Are you aware of being insured against your crop loan?
o Yes
o No
17. Are you aware that Hailstorm, Pre-Harvest, Inundation are also covered under this policy?
o Yes
o No
18. Do you know premium will be credited against rejection by the insurance company?
o Yes
o No
19. After having full knowledge about the insurance, now would you need insurance?
o Yes
o No
20. What do you think about the cost of insuring your crop?
o Low
o Affordable
o High
o Not Affordable

21. What else you think should also be added to this scheme?
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
Name:
……………………………………………………………………………………………

Location:

……………………………………………………………………………………………

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