Explanation:

About Pradhan Mantri Fasal Bima Yojana:
This crop insurance scheme will cover half of India’s cropped area in the next three years, up from the present level of 23%. In the first year, the target is to insure 30% of the agriculture land, 40% in the second year and 50% in the third year.
Towards this, the centre has substantially increased the budget for crop insurance from 2,823 crore in 2015-16 to 7,750 crore in 2018-19.
Under this scheme, farmers have to pay just 2% of the premium for kharif crop and 1.5% for rabi while the same for horticulture will be fixed at 5%
Under the previous crop insurance scheme, risks were only partially covered. The existing premium rates vary between 2.5% and 3.5% for kharif crops and 1.5% for rabi crops—but the coverage was capped, meaning farmers could, at best, recover a fraction of their losses. Also, the premium for commercial and horticulture crops was calculated on actuarial basis, meaning premiums could be as high as 25% depending on the risk factor involved.
There is no cap on subsidy on premium, meaning the government will bear the cost even if the balance premium is as high as 90%. In previous schemes, due to a cap on premiums, farmers did not get the full sum during claim settlement.
The government liability on premium subsidy will be shared equally by the centre and states.
The new scheme will cover local-level calamities such as hail storms and landslides and even cover farmers if they cannot sow crops due to inclement weather. Also, the scheme will cover post-harvest losses due to cyclonic and unseasonal rains.
While smartphones will be used to capture and upload data on crop cutting (to estimate loss in yield) to reduce delays in settling claims, remote sensing will be used to reduce the number of crop-cutting experiments.
The agriculture ministry will divide all districts of India into clusters and give it to insurance companies in order to make the Prime Minister ’s Crop Insurance Scheme a success.
Between 15-20 districts will be clubbed together and given to one insurance company for providing crop insurance to farmers.
Selection of insurance companies would be done through an open bidding system and insurance companies may be allowed to serve a cluster for more than one crop season or one year.