High premium cost and insurers’ reluctance to settle claims cited as the reason
The Pradhan Mantri Fasal Bima Yojana (PMFBY), the flagship insurance scheme of PM Narendra Modi for the agricultural sector is increasingly drawing flak from state governments for becoming a burden on their exchequer. After Andhra Pradesh, Telangana and Jharkhand informed their decisions to exit the scheme to the Centre earlier this year, Gujarat and Madhya Pradesh are also following suit.
Announcing the exit, Gujarat Chief Minister Vijay Rupani said the state government was forced to remove the tenders after insurance companies asked for exorbitantly high premiums. The tendency among insurers to approve less of farmers’ claims and the delays in settlement of claims has also led to state governments opting out of PMFBY. Persis Ginwalla, author of the report published by the Centre for Financial Accountability, said that on many crucial counts like coverage of farmers and area, and timely assistance to farmers, the PMFBY does not meet its stated objectives.
The Gujarat CM has launched an alternative State-funded scheme, the Mukhya Mantri Kisan Sahay Yojana which will cover all farmers under crop insurance with zero premium. He said under the PMFBY, 15-17 lakh farmers were covered, whereas now all 56 lakh farmers will be covered.
