PM Fasal Bima Yojana Moving Forward with a Slower Pace. Here's Why

PM Fasal Bima Yojana is a scheme to provide financial support by providing insurance coverage to the farmers in the event of failure of any of the notified crops as a result of natural calamities, pests, and diseases. The winter crop of 2019-20 is just about to conclude and farmers whose crops have failed this winter have many expectations. But, the settlement of crop insurance claims pertaining to the last Kharif season is moving forward at a rather slow pace.

Until December 31, PM Fasal Bima Yojana honored just Rs. 153 crores for total claims by insurers for Kharif 2019 crop damages reported by farmers while the summer crops saw insurance payouts to the tune of Rs 14,500 crore.

It becomes perplexing to know that the prevailing lower-than-expected claims are when large scale crop damages have been observed in the season due to the prolonged monsoon showers. Even though these are the initial days for insurance claims over Kharif season as there might be chances of fling of these insurance claims by March 2020, many experts notice a delay in an endorsement of claims applications by the government and insurers.

In September 2018, the PMFBY guidelines were amended by the government to address the issue of delays in claims settlement. The government made the insurers liable to pay 12% interest for payments made after the deadlines set for different crop cycles. The states were also ordered to pay 12% interest for the delay in the release of their share of premium beyond three months from the cut-off dates as insurance companies complained delays in settlement of the claims due to non-payment of premium by the state governments. With these small amendments, the year 2018-19 noticed an improvement in the claim settlements. But this year, the pace is relatively slower, which means farmers have to wait for their dues to be settled.