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On Wednesday, the Centre decided to restrict its premium subsidy in its flagship crop insurance schemes to 30% for unirrigated areas and 25% for irrigated areas (from the existing unlimited), and to make enrolment of farmers in the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) voluntary from the 2020 Kharif season.

What were the schemes?

At present, under PMFBY and RWBCIS, farmers pay a premium of 2% of the sum insured for all foodgrains and oilseeds crops of Kharif; 1.5% for all foodgrains and oilseeds crops of Rabi; and 5% for all horticultural crops. The difference between actuarial premium rate and the rate of insurance premium payable by farmers, which is called the Rate of Normal Premium Subsidy, is shared equally between the Centre and the states. However, states and Union Territories are free to extend additional subsidy over and above the normal subsidy from their budgets.

Until now, there was no upper limit for the central subsidy. On Wednesday, the Cabinet decided to cap the Centre’s premium subsidy under these schemes for premium rates up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops.

During 2018-19, an amount of Rs 29,105 crore was collected as gross premium under PMFBY and RWBCIS, which included farmers’ share of Rs 4,918 crore, the Centre’s share of Rs 12,034 crore, and the states’ share of Rs 12,152 crore. After the new changes come into effect, the share of the states is expected to go up in those states in which such crops are cultivated.

Sources said that by capping the subsidy for premium rates up to 30%, the Centre wants to disincentivise certain crops in such areas where growing these crops involve high risks in terms of crop insurance premiums.

How well-placed are states to raise their share of premium subsidy?

The states are already defaulting on their share, and the Centre’s new cap will put an additional financial burden on them. Madhya Pradesh has not paid its share of premium even for Kharif 2018, which comes to Rs 1,500 crore. As a result, farmers have not got their claims. In fact, most states have delayed the payment of their share of premium. Sources said that in some states, the expenditure on premium of PMFBY is more than 50% of their budget for agriculture.

What can be the fallout of making the schemes voluntary?

That move will lead to a rise in the rates of premium, as the area covered under insurance and the number of enrolled farmers are expected to come down significantly. As of now the schemes are compulsory for all loanee farmers and optional for other farmers. Non-loanee farmers under the crop insurance schemes are much fewer than loanee farmers. If the latter opt out of the schemes, the number of insured farmers will drastically come down. Sources say that in such a scenario, the rate of premium of certain crops in some areas may go beyond 30%.



The sedition law, under Section 124A IPC, is a legacy of the British Raj, which used it to stifle dissent and the national movement for freedom. The archaic law has been challenged in various courts. And in 1995, the Supreme Court in the Balwant Singh and Another v State Of Punjab case, had observed: “The casual raising of the slogans, once or twice by two individuals alone cannot be said to be aimed at exciting or attempt to excite hatred or disaffection towards the Government…, Section 124A IPC, would in the facts and circumstances of the case have no application whatsoever and would not be attracted to the facts and circumstances of the case.”

The top court had noted that in spite of the fact that the appellants raised the slogans a couple of times, the people, in general, were unaffected and carried on with their normal activities.

The court had then pulled up the police for exhibiting lack of maturity and more of sensitivity in arresting the appellants for raising the slogans.

What did SC say in 1962 – Kedarnath Singh vs State of Bihar?

A five-Judge bench of the Supreme Court in Kedarnath Singh vs State of Bihar (1962) had ruled that while the clause was constitutional, its operation was limited only to activities involving “incitement to violence or intention or tendency to create public disorder or cause disturbance of public peace”.

As per the judgment, an allegedly seditious speech will not attract the charge of sedition unless it is established that it incited violence or mooted creating public disorder.


The pace at which private sector banks are gaining market share at the expense of their public sector counterparts is staggering. As reported in this paper, deposits of the top eight private sector banks rose by Rs 2.68 lakh crore between July and December 2019, higher than the Rs 2.58 lakh crore increase in the top eight public sector banks.

Over the past few years, incremental growth of private banks in both deposits and advances has far outstripped that of public sector banks. In 2016-19, the share of private banks in incremental deposits rose to 81 per cent, up from 19 per cent in 2011-15, while their share in incremental loans stood at 69 per cent in 2018-19.


First, the Reserve Bank of India’s determined push to clean up the balance sheets of public sector banks, which forced them to recognise the true extent of bad loans in the system, left them with little funds for expansion. Then, placing several of these banks under the RBI’s corrective action framework restricted their banking activities.

Along with these, other factors such as personalised services, the extensive use of technology, and the relatively higher interest rates offered by private banks could have aided in this shift. This shift, dubbed by some as privatisation by stealth, will have far reaching ramifications for both public sector banks as well as their owner, the government, as gains by private banks will come at the expense of public banks, leading to an erosion in their value.


So far, the government’s strategy of turning around public banks, which rests on four pillars — recognition of bad loans, resolution and thus recovery of value from these stressed loans, and recapitalisation and reforms in banks — hasn’t had the effect it had hoped for, largely because of the lack of reforms to address structural issues that continue to plague state-controlled banks.

While improving governance standards and allowing banks to function as independent and autonomous entities should be a top priority, it is unlikely to happen with the government continuing to hold a controlling stake in banks.


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