✎ PMFBY provides affordable crop insurance to farmers against natural disasters, ensuring income stability and rural livelihood protection.
Relevance for Banking, SSC & RBI Grade B exams: Polity & Governance
The **Pradhan Mantri Fasal Bima Yojana (PMFBY)**, launched on 18 February 2016, provides affordable crop insurance to farmers against risks like drought, floods, cyclones, hailstorms, pests, diseases, and post-harvest losses. With a budgetary allocation of ₹12,200 crore for 2026–27, the scheme has insured over 92.46 crore farmer applications since its inception, disbursing ₹2.06 lakh crore in claims to 26.33 crore farmers. By leveraging technology such as the **Yield Estimation System (YES-Tech)** and **Weather Information Network and Data Systems (WINDS)**, the PMFBY ensures faster, fairer, and more transparent claim settlements, strengthening rural livelihoods and agricultural stability. For banking and SSC aspirants, PMFBY is a key example of government-led financial inclusion, demonstrating how insurance mechanisms mitigate climate-induced risks in agriculture—a sector critical for economic stability and food security. RBI Grade B candidates should note its role in reducing systemic risks in rural credit markets, as timely payouts prevent loan defaults and sustain agricultural financing.
The scheme’s relevance for exams like **Bank PO, IBPS, SBI, and SSC** lies in its governance model, which blends welfare economics with risk management. For **Banking exams**, PMFBY highlights the interplay between government schemes and financial institutions, as banks auto-deduct premiums for loan-linked farmers, showcasing last-mile delivery of public services. **SSC aspirants** should focus on its socio-economic impact, such as protecting small farmers like Anwar Hussain from Assam, who received ₹50,600 in claims after heavy rains destroyed his crops, enabling him to repay debt and reinvest. The scheme also underscores India’s commitment to climate-resilient agriculture, a topic often tested in **RBI Grade B’s Economic & Social Issues** section, where questions may probe its role in stabilizing rural incomes and reducing agrarian distress.
Source: PIB (Press Information Bureau)
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