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Insurance and lending companies in agro sector should use drones to reduce credit and insurance risks: DEA’s report on fintech


A report by the Department of Economic Affairs on fintech related issues has recommended insurance and lending companies in the agriculture sector “to use drone and remote sensing technology directly or those provided by fintech companies”. It noted that by doing this, credit/insurance risks can be reduced, and that drones can be used to resolve “discrepancies in self-reported cropping patterns and crop cutting experiment processes”. The report added that misuse of crop loans is a widespread issue, and can be addressed by using drones, and oddly enough, that by using drones’ technology, insurance claim assessments and settlements in the agriculture sector could take a lot less time.

Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), drones can be deployed for accurate assessment of yield loss, risk classification, and rationalisation of crop cutting experiments among other things, the report noted. It also briefly touched upon the Ministry of Civil Aviation’s drone policy.

Regulations under the current Digital Sky policy

The Union government had announced drone regulations in August 2018 and said they would come into effect in December, when the Digital Sky Platform for registration of drones was launched. The rules created a registrations and licensing regime for flying drones and providing more legal certainty to drone operators. The key rules in Digital Sky concerning drones are:

Regulations under the current Digital Sky policy

  • All drones (other than nano drones) are required to have a unique identification number (UIN). The fee for a fresh UIN is Rs 1000.
  • All drone operators (except for nano and micro drones) are required to obtain an Unmanned Aircraft Operator Permit (UAOP). The fee for a fresh UAOP is Rs 25,000 and is valid for 5 years.
  • No permission, no take off (NPNT) – Before any flight, a NPNT clearance needs to be obtained
  • All drones need to have Insurance and an ID plate, with the UIN engraved on a fire-resistant plate
  • Nano drones don’t have to be registered or obtain NPNT compliances. They can be operated up to 50 feet or in enclosed spaces.
  • Micro drones cannot be flown above 200 feet; all other drones can be flown up to 400 feet
  • Drones can be operated only during the day, and within line of sight
  • Air space has been partitioned into Red Zone (flying not permitted), Yellow Zone (controlled airspace), and Green Zone (automatic permission).
  • Drones fall under the restricted items category and can’t be carried in hand baggage in aircraft

After formally announcing these regulations, then Minister for Civil Aviation Suresh Prabhu had tweeted that drones could be registered online, on the Digital Sky portal.

Drone policy 2.0 soon?

In January this year, the government had suggested establishing a corridor for flying drones and setting up a regime for licensing and authorising drones. Then Minister of State for Civil Aviation Jayant Sinha had announced an updated policy for drone operations at the Global Aviation Summit in Mumbai. Here are major proposals in the new policy that Sinha announced:

  • Drone corridors: Creating space in the sky with dynamic red, yellow and green zones. “A 5-km radius around airports and areas around Rashtrapati Bhavan will be red zone…There will be plenty of green zones, and some yellow zones,” said the minister.
  • Drone service providers for registering, licensing and regulation for flying drones
  • Drone ports: To enable drone corridors for different types of drones, and to operate drones beyond the visual line of sight, with payloads, and to enable automation of flight. “Each operational drone has to be registered” said the minister. This was already required in the first phase of drone regulations, “they will become more stringent in Drone Regulations 2.0 as we cross these thresholds of beyond visual line-of-sight, payloads, and automation”
  • Automatic air traffic management: To enable bi-modal control which will ensure that both the DSPs and air traffic management have control of the drone
  • Drone Directorate: setting up a Drone directorate under the Directorate General of Civil Aviation (DCGA) to issue guidelines for drone operations. The directorate may prescribe “a maximum lifecycle for each drone-type and operators must apply for re-certification at the end of the lifecycle.”
  • 100% FDI under automatic route for UAS (Unmanned Aerial System) and RPAS (Remotely Piloted Aircraft System)
  • The new regulations includes features for “protecting personal data by design

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