Which of the following statements is/are correct ? 1. The Government of India has discontinued the Pradhan Mantri Fasal Bima Yojana. 2. The Government of India has approved the continuation of Restructured Weather Based Crop Insurance Scheme. Select the answer using the code given below :

Correct — B, 2 only. The Pradhan Mantri Fasal Bima Yojana has not been discontinued at any point since its launch in 2016; it remains the Government of India's flagship crop insurance scheme, and its continuation was approved alongside the Restructured Weather Based Crop Insurance Scheme in the Cabinet decision covering the period to 2025-26. So statement 1 is false and statement 2 is true. The pairing is the point of the question. PMFBY and RWBCIS are the two arms of the same crop-insurance architecture — one indemnity-based, settling claims on measured yield loss, the other index-based, settling on a weather parameter such as rainfall or temperature crossing a trigger — and they are extended, funded and reviewed together. A statement that one was scrapped while the other was continued describes something that has not happened.

• (a)1 only — Inverts the item completely, asserting the scheme was scrapped and denying the continuation that actually occurred.
• (c)Both 1 and 2 — The tempting option, because PMFBY has genuinely been reformed several times — states have opted in and out, and the 2020 revamp made participation voluntary for farmers. Reform and voluntary participation are not discontinuation.
• (d)Neither 1 nor 2 — Rejects the continuation as well. The continuation of RWBCIS is on the record, so this cannot be right.

PMFBY, launched in 2016, replaced the earlier National Agricultural Insurance Scheme and its modified version. Farmers pay a capped premium — 2 per cent of the sum insured for kharif food and oilseed crops, 1.5 per cent for rabi, and 5 per cent for commercial and horticultural crops — and the Centre and the states share the balance of the actuarial premium. RWBCIS runs on the same subsidy structure but pays on a weather index rather than on assessed yield.

The distinction between the two is worth holding because it explains why both survive. An indemnity scheme like PMFBY needs crop-cutting experiments to establish yield loss, which is accurate but slow and disputable; a weather-index scheme like RWBCIS pays automatically when a measured parameter crosses a trigger, which is fast and cheap to administer but can pay a farmer who suffered no loss, or fail to pay one who did — the problem known as basis risk. Running both lets the system match the instrument to the crop and the risk. The 2020 revamp of PMFBY made enrolment voluntary for loanee farmers, which caused enrolment to fall in some states and several states to withdraw, and that is the real news event a question like this is testing against a candidate's memory of.

• PMFBY was launched in 2016, replacing the National Agricultural Insurance Scheme and its modified version.
• Farmer premium is capped at 2 per cent of sum insured for kharif food and oilseed crops, 1.5 per cent for rabi and 5 per cent for commercial and horticultural crops.
• RWBCIS is index-based: payout follows a weather parameter crossing a trigger, not an assessed yield loss.
• The 2020 revamp made participation voluntary for loanee farmers, after which enrolment patterns and state participation changed.
• Basis risk — the gap between the index and the farmer's actual loss — is the central weakness of weather-index insurance.

• Treating a scheme's revamp or a state's withdrawal as discontinuation of the scheme itself.
• Assuming PMFBY and RWBCIS are alternatives where one replaced the other. They run in parallel and are approved together.
• Mixing up the premium caps. 2 per cent kharif, 1.5 per cent rabi, 5 per cent commercial and horticultural.

As a pair of statements where one asserts a discontinuation that never happened. The technique is common with flagship schemes, because candidates remember that something changed without remembering what.

No directly related past PYQ was found.

• practice — not a real PYQ

  Under PMFBY, the maximum premium payable by a farmer for a kharif food crop is:

  • (a)1.5 per cent of the sum insured
  • (b)2 per cent of the sum insured
  • (c)5 per cent of the sum insured
  • (d)10 per cent of the sum insured

  Answer(b) 2 per cent — 1.5 per cent for rabi and 5 per cent for commercial and horticultural crops.

• practice — not a real PYQ

  'Basis risk' in weather-index crop insurance refers to:

  • (a)The risk that premiums exceed claims
  • (b)The mismatch between the index trigger and the farmer's actual loss
  • (c)The risk of a state withdrawing from the scheme
  • (d)The delay in conducting crop-cutting experiments

  Answer(b) The mismatch between the index trigger and the farmer's actual loss — the central weakness of index-based cover.