New Delhi: Coming to the rescue of farmers hit by unseasonal rains and hailstorm, Prime Minister Narendra Modi on Wednesday announced higher compensation for crop damage and eased criteria for them to avail government support.

The Prime Minister said that he has also asked banks to restructure loans of affected farmers and instructed insurance companies to pro-actively settle their claims.

Speaking at the launch of Rs 20,000-crore MUDRA Bank, Modi said criteria of 50 per cent crop damage for providing compensation to affected farmers has been reduced to 33 per cent which will help more farmers to get compensation for their crop loss.

"Second important decision we have taken is to raise the parameters for helping him (farmers). The amount of compensation has been increased to 1.5 times. If earlier, he was getting Rs 100 as compensation, now he will get Rs 150, if it was Rs 1 lakh, he will get Rs 1.5 lakh, a 50 per cent increase," he said.

Farmers, the Prime Minister said, have suffered a lot on account of natural calamities.

"Last year, it was due to less rainfall and this year due to unseasonal rainfall and hailstorm", Modi said, adding that he took a review of the crop damage with Ministers sent to undertake on the spot assessment.

Yesterday, Agriculture Minister Radha Mohan Singh had said that unseasonal rains and hailstorms have damaged rabi (winter-sown) crops in about 113 lakh hectares of crop area in the country.

On providing higher compensation to the affected farmers, Modi said, "(it) will impose a heavy burden on the exchequer but it is important to help them as they are in distress."

"We have to worry about the farmer of India, who faces problems due to lack of adequate rainfall or unseasonal rains," the Prime Minister said.

Talking about the Micro Units Development Refinance Agency (MUDRA) Bank, Modi said it is aimed at providing financial assistance to the "unfunded" small entrepreneurs who provide employment to a large number of people.

Large business groups, which attract a lot of media attention, provide employment to only 1.25 crore people, he said, adding that 5.75 crore small entrepreneurs, with an average loan size of Rs 17,000, employ 12 crore people.

Generating employment and promoting self-employment is the priority of the government, the PM said, adding, "providing loans to small entrepreneurs will provide a big push to the GDP."

Small borrowers repay loans promptly, he said, stressing that, saving is a habit in India and there is a need to (give a) push to this traditional strength.

Exuding confidence over the success of the MUDRA Bank initiative, Modi said, "Write down my words. After one year, bankers will queue in front of MUDRA Bank and ask it to give 50 lakh clients."

Speaking at the same event, Finance Minister Arun Jaitley said MUDRA Bank is aimed at "funding the unfunded".

The Finance Minister regretted that although 20 per cent of the country's population in dependent on 5.7 crore micro and small entrepreneurs, they do not have access to institutional credit.

Referring to the Land Bill, Jaitley said about 300 million landless people would get employment in industrial corridors to be set up in rural areas.

"This land reform bill that we have brought envisages industrial corridors. When these corridors will be set up in several places in India, they will create employment opportunities for 300 million landless people," he added.

Initially, MUDRA Bank will work as a non banking financial company (NBFC), as a subsidiary of Small Industries Development Bank of India (SIDBI) for lending to micro finance institutions (MFIs), and later it will become a regulator for MFIs.