Abstract

Crop insurance is one of the utmost significant tools which can be used in agriculture to protect farmers against loss. PMFBYS plays a major for the betterment of agriculture by providing financial assistance to farmers, stabilizing the income of the farmers, and also encouraging farmers to adopt innovative and modern agricultural practices. The present study focuses on analysing the effect of Pradhan Mantri Fasal Bhima Yojana Scheme in Karnataka. The study considers five variables claim amount, farmer’s share premium, number of insured, sum insured and area insured. The study has covered from 2016 to 2021 for six years of PMFBYS started in Karnataka also considering both Karif and Rabhi. The study is carried out on Descriptive statistics, VAR (Vector Auto Regression) Estimation, Least square with the dependent variable for each five variables with individual formulas, and Roots of Characteristics Polynomial. To validate the result the VAR Granger Causality/Block Exogeneity wald Tests, VAR Residual Normality Tests, VAR Residual Serial Correlation LM Tests are carried out. The study is trying to contribute to the government of Karnataka and the Insurance Regulatory and Development Authority of India. In this, regard the model satisfies the stability condition and helps for further study on PMFBYS.