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      Question

      A farmer growing a horticultural crop under PMFBY pays a

      premium of 5% of the sum insured. If the sum insured is ₹1,00,000, how much does the farmer pay as premium, and how much is shared between Centre and State?
      A Farmer pays ₹2,000; Centre and State share ₹98,000 Correct Answer Incorrect Answer
      B Farmer pays ₹5,000; Centre and State each share 50% of the remaining actuarial premium Correct Answer Incorrect Answer
      C Farmer pays ₹5,000; Centre pays 75% of balance; State pays 25% of balance Correct Answer Incorrect Answer
      D Farmer pays ₹1,500; Centre and State share balance equally Correct Answer Incorrect Answer
      E Farmer pays ₹5,000; Centre pays the entire balance premium Correct Answer Incorrect Answer

      Solution

      Answer: (b) For horticultural crops, the farmer pays 5% of sum insured (₹5,000 on ₹1,00,000). The balance between 5% and the actuarial premium is shared 50:50 between Centre and State.

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