Parliamentary panel flags Fasal Bima plan woes

Source: Times of India

Relevance: Analysis of Pradhan Mantri Fasal Beema Yojana (PMFBY).

Synopsis: Issues with PMFBY and recommendations to make it more efficient.


A parliamentary panel has expressed concerns over withdrawal or non-implementation of Pradhan Mantri Fasal Beema Yojana (PMFBY) in few states and held that more such examples will defeat the very purpose of the scheme.

Punjab never joined the PMFBY, whereas Bihar and West Bengal withdrew from it in 2018 and 2019 respectively.

Andhra Pradesh, Gujrat, Telangana and Jharkhand did not implement the scheme last year.

Issues identified

Panel identified the following issues:

  1. Decrease in coverage area– The coverage area has decreased from 567.2 Lakh hectares in 2016-17 (highest coverage in the history of crop insurance in India) to 497.5 Lakh hectares in 2019-20. This has happened due to following reasons:
    • De-duplication by making Aadhar mandatory
    • Announcement of debt waiver scheme by some states
    • Land record integration in the states of Maharashtra and Odisha
    • Non-implementation/suspension of implementation of the scheme by some states
    • Financial constraints and low claim ratio during normal monsoon season
  2. Delay in claim settlement– Though there is provision of penalties (12% interest rate per annum to be paid by insurance companies to farmers for delay in claim settlement beyond 10 days prescribed cut-off date) it has failed to resolve the problem.
  • Make it technology driven: The panel recommended the ministry to make the scheme more technology driven to improve the settlement of claims and make it hassle-free and farmer friendly.
  • Return the premium with interest: It also recommended that when the reason for delay is non-payment of subsidy by the state, the premium paid by the farmers be returned along with interest within a fixed time frame.

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