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The Government of India introduced the “Bunkar Bima Yojana” in December 2003 which was a combination of “Janshree Bima Yojana” and the Add-on Group Insurance Scheme being implemented in collaboration with the Life Insurance Corporation of India. Since, 2005-06 this scheme has been implemented by the Handlooms, Textiles & Handicrafts Department of the Government of Odisha with the revised title “Mahatma Gandhi Bunkar Yojana”.

The basic objective of the ‘Mahatama Gandhi Bunkar Bima Yojana’ is to provide enhanced insurance coverage to the handloom weavers in the case of natural as well as accidental death and in cases of total or partial disability. The concerned handloom authority in the state will finalize the insurance coverage, as the Life Insurance Corporation of India administers the scheme.

The State Governments and the State Handloom Corporations/Apex/Primary Handloom Weavers Cooperative Societies/Unions/ Associations shall be actively associated in the implementation of the scheme by way of sensitizing the handloom weavers to join the scheme through advertisements through print and other media.

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Premium Insurance Coverage: The annual total premium of ₹ 330/- per member will be shared as under:

1. GOI contribution: ₹ 150/-

2. Weavers’ contribution: ₹ 80/-

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3. LIC’s contribution: ₹ 100/-

Operational Modalities:

1. The scheme is renewable every year and continuation of coverage is ensured only on payment of premium on the due date of renewal every year. The premium amount shall be paid by the beneficiary only one-time for the whole year to the Life Insurance Corporation of India. This scheme will be effective from 1.10.2007.

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2. The premium, once paid, shall not be refunded.

3. Maximum number of renewals shall be effected each year. The insurance coverage is ordinarily effective only after receipt of the entire amount of premium i.e. both the Government’s as well as beneficiary’s share. In an unlikely situation where the Government’s share of the premium is not ready, the LIC shall accept the share of the beneficiary and affect the coverage accordingly.

4. The office of the State Director-in-charge of Handlooms & Textiles and its subordinate offices in the field shall be the Nodal agencies for implementation of the scheme. Nodal agency will act for and on behalf of the insured members in all matters relating to the insurance cover. LIC will get in touch with State Directors In-charge of Handlooms for identification of beneficiaries, furnishing forms, instructions etc. for maximum coverage of weavers under the scheme.

Release of Funds:

1. For release of funds, LIC and the Authority In-charge of Handlooms in the State shall identify the weavers to be covered under the MGBBY. The Office of the Development Commissioner for Handlooms (DCHL), Government of India (GOI) in the Ministry of Textiles (MOT) shall release its share of the premium to the Life Insurance Corporation of India directly in advance, based on the number of handloom weavers to be covered under the Scheme. Every subsequent request for release must be accompanied with the note on the performance of the insurance company regarding the claims made and claims settled.

2. The Central Government share of the premium will be released directly to the LIC.

Monitoring And Evaluation:

1. Monitoring and evaluation of the progress of the Scheme will be done by the State Governments, which will submit quarterly physical and financial progress reports to the Development Commissioner for Handlooms.

2. LIC will hold a meeting with the State Director/Commissioner In-charge of Handlooms and the Assistant Director, Handlooms at the district level in the 2nd week of every month to review the implementation of the MGGBY Scheme. LIC will arrange to provide the figures pertaining to that State from their Claims Department well in advance.

3. The Office of the Development Commissioner for Handlooms will monitor the progress through its field office and by convening meetings with State Government and LIC from time to time.


Mahatma Gandhi Bunkar Bima Yojana is to provide insurance coverage to handloom weavers as follows:

  1. In the event of the natural death of the weaver, a Sum Assured of ₹ 60,000 will become payable to the nominee.
  2. In the cause of Accidental Death or Total Permanent Disability, a Sum Assured of ₹ 1,50,000/- will become payable to the nominee.
  3. In case of Partial Disability, a Sum Assured of ₹ 75,000/- will become payable.
  4. The scheme also provides scholarship to the children of parents who are covered under it under “Shiksha Sahyog Yojana”. A scholarship of ₹ 600/- per six month per child is to be paid to students studying is standard IX to XII for a maximum period of four years or till they complete XII standard, whichever event occurs earlier.


  1. The weaver should be earning at least 50% of his income from handloom weaving.
  2. All weavers, whether male or female, between the age group of 18 and 59 years are eligible to be covered under the scheme, including minorities, women weavers, and weavers belonging to NER.
  3. The weavers belonging to the State Handloom Development Corporations/Apex/ Primary Handloom Weavers’ Cooperative Societies will be covered under the Scheme.
  4. Weavers outside co-operative can also be covered under the scheme on a certificate from the State Directorate of Handlooms that they are fulfilling the eligibility conditions.
  5. The children of weavers who are covered under “Shiksha Sahyog Yojana” will also be eligible for scholarship and the benefit of scholarship is restricted to two children of the member covered. Both the children irrespective of gender based discrimination will be covered for scholarship.

NOTE 1: It will be the responsibility of the State Director in charge of Handlooms to verify the eligibility of the weavers who are proposed to be covered under the scheme.

NOTE 2: It will be the responsibility of the State Director in charge and ICICI to ensure that women weavers, weavers belonging to minorities, and weavers of NER States (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim) are given adequate representation while implementing the scheme.

Application Process


Step 01: The application form shall be made available to the nodal agencies by the LIC. No medical certificate is required and self-certification would suffice the purpose.

Step 02: A prospective beneficiary shall be required to fill up an application-cum nomination form and submit the same to the nodal agency along with his/her share of the premium.

Step 03: On receipt of the above, the nodal agency shall scrutinize the application and if found eligible, shall accept the premium amount and forward the lists of such beneficiaries along with the premium amount to the LIC.

Step 04: On receipt of the premium amount along with the list of beneficiaries from the nodal agencies, the LIC shall issue Cards/ Certificates to all the weavers covered under the scheme and it should be designed in such a way that the month/date of renewal should also be mentioned. The cards should be in vernacular language. This would enable weavers to claim their dues from LIC.

Step 05: In the case of death or disability, the nominee/ beneficiary concerned shall submit his/her claim to the LIC through the nodal agency with required documentary evidence such as death certificate/post-mortem examination report/medical certificate/discharge certificate, and other related documents, as applicable. The nodal agency shall forward the claim, to the LIC within 15 days of receipt of the claim. LIC shall settle the claim within one month from the date of receipt of the claim and pay the amount to the beneficiary/ nominee directly by A/c Payee Cheque (under intimation to the Nodal Agency) or through the nodal agency.

Step 06: In the event of non-payment of the insurance premium for the next year by the beneficiary, the insurance cover shall automatically cease. The beneficiary will however be free to rejoin the scheme in any subsequent year on payment of the required premium.

Step 07: In case a handloom weaver changes his employment during the period of insurance from one Society or Corporation to another, he/she, as the beneficiary of the scheme, shall furnish intimation to the nodal agency.

Procedure for Scholarship:

Step 01: The member of “Mahatma Gandhi Bunkar Bima Yojana” whose child is eligible for a scholarship shall fill up an application form (available with the nodal agency) and submit it to the nodal agency.

Step 02: The applications duly filled up and certified will be sent along with the list of beneficiary students by the nodal agency to the concerned LIC P & GS Unit for disbursement of scholarship under “Shiksha Sahayog Yojana”. The scholarship will be disbursed to the beneficiary students through the concerned nodal agency.

Step 03: LIC will send the Account Payee Cheque in the name of the nodal agency along with a list of beneficiary students who will pass on the scholarship to eligible students. The nodal agency has to maintain records and submit certificates of utilization periodically to LIC, P&GS Unit.

Step 04: No premium is charged either to the parent of the scholarship holder or to the nodal agency. It is an additional benefit given to the children of the parents covered under Mahatma Gandhi Bunkar Bima Yojana. If the premium under Mahatma Gandhi Bunkar Bima Yojana is not paid on the annual renewal date in such case, the child shall not be eligible for scholarship.

Step 05: The beneficiaries have to be selected for “Shiksha Sahayog Yojana” out of the members covered under Mahatma Gandhi Bunkar Bima Yojana. The targeted beneficiary students of a State may be divided among the members covered under the “Mahatma Gandhi Bunkar Bima Yojana” in proportion to the number of lives covered within that State. The final selection shall be based on the criteria of the poorest of the poor, as the number of scholarships is limited and without any gender discrimination.

Documents Required

  1. Proof of identity i.e. Aadhar Card etc.
  2. In the case of death or disability, the nominee/ beneficiary concerned shall submit documentary evidence such as a death certificate/post-mortem examination report/medical certificate/discharge certificate and other related documents, as applicable.
  3. In the case of accidental claim, police inquiry report will also be required to be submitted.
  4. Photocopy of first page of Bank Passbook along with the photocopy of latest updated account.
  5. Any other documents, as requested by concerned authorities.
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