Mumbai: Terming agriculture as "absolutely critical to the country's economy", union Finance Minister Arun Jaitley on Tuesday launched the "Pradhan Mantri Fasal Bima Yojana" and "Unified Package Insurance Scheme" here.
He said the revamped insurance schemes now launched have the potential to reduce distress in the farm sector and would be rolled out in a "mission mode" from April 1 to cover Kharif crops.
Though the country had crop insurance schemes in the past, they were partially successful as they were mainly linked to crop loans, Jaitley pointed out.
"This is a crop insurance scheme with a difference, and the difference is absolutely critical to the Indian farmer," he said.
Since it was dependent on large volumes, the new scheme could cover much larger risks at a very low premium, he said.
While the farmers' premium would be 2 percent for Kharif food grain and oilseeds, it would be 1.5 percent for Rabi crops, and in the event of a crop failure, the farmers would be paid more.
The government plans to cover 50 percent of the farmers in the country, mostly those dependent on rain-fed agriculture, and this would be a significant step to making India an "insured and pensioned society", Jaitley said.
Noting that agriculture will have to grow faster for the country to get rid of poverty and push the overall GDP, Jaitley said after two successive monsoons, poor rainfall this year (2016) could put the systems to test.
In such an eventuality, the successful implementation of the new crop insurance schemes could prove to be a game-changer and the entire Indian banking, insurance and financial system would be mobilized to ensure its success, Jaitley assured.
The new scheme proved for a change in criteria to determine crop losses by providing local-level assessment for calamities like hailstorms, etc and simple technologies like phones and remote sensors would be used for making quick estimates and early settlement of claims.