The Maharashtra government is preparing to launch its own crop insurance scheme, arguing that insurance companies engaged in the Pradhan Mantri Fasal Bima Yojana (PMFBY) benefit financially while farmers who pay crop insurance are left out in the cold.
The union government, on the other hand, has stated that the primary reason for pending claims is the failure to receive the State government’s share of premium subsidies.
Deputy Chief Minister Ajit Pawar mentioned the crop insurance scheme and farmer complaints during the ongoing Maharashtra Assembly Session while presenting the annual budget. Pawar told the State Assembly during budget discussions that farmers had repeatedly complained about the majority of companies involved in PMFBY. He stated that the Maharashtra Chief Minister, State Agriculture Minister, and Chief Secretary had already discussed the matter with the Union government. Pawar stated that Gujarat has established its own crop insurance scheme; Maharashtra wishes to do the same but requires approval from the Union Government.
According to Pawar, if a farmer pays a ₹1,000 installment for crop insurance, he will receive ₹400-450 as an insurance claim after crop loss. Pawar and leaders of the ruling Shiv Sena, Nationalist Congress Party, and Congress claimed that insurance companies involved in the PMFBY scheme benefit from the scheme while farmers do not receive timely insurance claims.
The position of the Union Government
According to data from the union government, the total premium received by companies operating in Maharashtra from the scheme’s inception to 2020-21 is ₹27,698.07 crore, while claims reported are ₹19,906.42 crore. Claims totaling ₹19,633.47 crore have been paid out of a total of ₹19,838.65 crore claims approved. Claims totaling approximately ₹272.95 crore are pending in relation to the reported claims.
Last month, Minister of Agriculture and Farmers Welfare Narendra Singh Tomar told the Lok Sabha that the main cause for delayed claims is the failure to get the State government’s portion of premium subsidy. He was responding to a query about PMFBY in Maharashtra.
The PMFBY is a voluntary program for states, and Maharashtra has been implementing it from 2016-to 17. According to the Minister, claims are worked out and settled by insurance firms in accordance with the scheme’s regulations.
Reasons for payment delays
According to the union government, admissible claims under the PMFBY are generally paid by the respective insurance companies within two months of the completion of Crop Cutting Experiments (CCEs)/harvesting period and one month of notification for invoking the risks/perils of prevented sowing, mid-season adversity, and post-harvest losses. This is subject to timely receipt of the complete share of premium subsidy from the relevant government.
‘However, settlement of a few claims in some states, including Maharashtra, has been delayed due to factors such as the delayed transmission of yield data, late release of their share in premium subsidy, yield-related disputes between insurance companies and States, non-receipt of account details of some farmers for transfer of claims to the bank accounts of eligible farmers, and National Electronic Fund Transfer (NEFT) related issues,’ the Minister stated in a written reply to the Lok Sabha.
According to the government, some of the reasons for delayed payment include incorrect and incomplete entry of individual farmers’ data on the National Crop Insurance Portal (NCIP) and delay in remittance of farmers’ share of premium/non-remittance of farmers’ share of the premium to the concerned insurance company.