The government’s flagship crop insurance scheme has not paid claims worth Rs 1,500 crore to farmers in Bihar and Telangana as these states have not yet disbursed their premium subsidy.
The total pending claims stood at Rs 5,000 crore as of the kharif season in 2017, of which nearly 30 percent was pending because of late subsidy disbursal.
“Ninety percent claims (of the remaining Rs 3,500 crore) will be disbursed within next week, barring the states which have not released the subsidy,” said Ashish Bhutani, joint secretary at the credit division of the Ministry of Agriculture, during a press meet organised by GIC Re in Mumbai.
For the Rs 15,938 crore claims reported during the kharif season in 2017, about 69 percent of claims worth Rs 11,000 crore have been paid so far, said Bhutani. The government plans to settle all claims for the kharif season in 2018 by Jan. 31, 2019, he said.
The government plans to increase insurance coverage under the Pradhan Mantri Fasal Bima Yojana to 50 percent of the gross sown area to about 980 lakh hectares compared with 29 percent area insured as on March 31, 2017, as it looks to revise the scheme’s guidelines by mid-August.
“We might not be able to achieve it, but we are trying our best to ensure it’s 50 percent,” said Bhutani.
Most states have completed notification of crops well in advance this year providing insurers more time to cover farmers, especially the non-loanee ones, he said.
The scheme, launched in April 2016, is implemented by insurance companies picked through bidding. The farmers pay 2 percent of the actuarial premium rate for kharif (monsoon), 1.5 percent for rabi (winter) and 5 percent for horticulture crops as premium. The rest is subsidy, equally borne by the state and central governments.