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What has happened?
Insurance companies collected premiums of Rs 22,180 crore in 2016-17 and Rs 24,454 crore in 2017-18, both directly from farmers and as government subsidy, under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
The issue
Low claim payments (under PMFBY) defeats the whole purpose of insurance — which is to provide timely relief against crop loss/damage, so that the farmer can at least repay his bank loans and is not forced to go to the moneylender.
Delay in pay-outs
The 2017 kharif crop’s harvesting was over by December, but farmers have till now got only Rs 402 crore of payments, as against estimated claims of Rs 13,655 crore by state government and Rs 1,759 crore approved by insurance companies
What needs to be done?
- Center should fund entire premium subsidy
- The insurance companies can no longer, then, complain about not getting their premium monies, especially states’ share of subsidy, in time
- The Centre can further link release of subsidy to the states adhering to prescribed operational schedules, including carrying out the requisite number of CCEs (Crop cutting experiments) using remote-sensing technology for smart selection/sampling of fields and capturing survey data using mobile phones with time and date stamping
This will enable faster processing and payment of claims
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