Delays in settling claims under Pradhan Mantri Fasal Bima Yojana

Pradhan Mantri Fasal Bima Yojana (PMFBY) could have been one of the perfect schemes of Central Government for farmers if it could have implemented in a better and transparent manner. However, due to a shady and irresponsible attitude of the Government Officials and Insurance Companies, the scheme is losing faith among the farmers of India.

Farmers all over India gave an unprecedented greeting to the newly devised crop insurance scheme, which was introduced in the year 2016. The farmers’ share of premium under PMFBY was based on one season, one rate. They had to pay just 1.5 percent of the premium for rabi crop, and 2 percent for Kharif crop. The remaining premium was paid as subsidy by the Centre and states together. Although cost-wise it was a win to win situation for farmers, the only handful of farmers in a few regions could able to get the claim for the crops which were insured during the year 2016.

All went well until the collection of premiums from the farmers. However, when the time for settling insurance claims came, the official at both the Agriculture Department of State Government as well as officials of the respective insurance companies washed their hands by giving lame excuses for delay in the processing of claim settlements.

According to the Ministry of Agriculture & Farmers Welfare, during 2016-17, total claims have been estimated at about Rs. 15100.68 crore (68%) out of the gross premium of Rs. 22,344.93 crore. Of this amount, only Rs. 6624.65 crore has been settled by the insurance companies and another Rs. 9446.83 crore has been approved for settlement. However, there is no idea when this payment will reach the beneficiary farmers. Farmers will lose faith completely in the scheme if the insurance company does not settle the remaining claims at the earliest.

Pradhan Mantri Fasal Bima in our village

I and my brother, Arul personally promoted the Pradhan Mantri Fasal Bima Yojana by telling the benefits of the scheme using the name of our Prime Minister Narendra Modi in order to connect with the masses by stating that “this is a new scheme devised by our PM Modiji” and stating how much government pays to the insurance company on behalf of each farmer as a premium.

We got a very good response from farmers of Thiruppeyar, Thiruppeyar Thakka, Pudukalani, Parindal, Mazhavarayanur. Response from the public was so much that even the collecting agricultural officer was found it difficult to handle. Therefore, he gave the responsibility of collecting premiums to my brother, Arul (who is the ex-vice president of Thiruppeyar Village Panchayat). My brother collected a gross premium of Rs.71,130/- from 292 farmers from the farmers of the above-said villages covering 360 Acres of Crop of Black Gram & Paddy. I recorded their detail in an excel sheet and submitted to the local agriculture office at Ulundurpettai for processing within the prescribed due date of 30^th November 2016, which was later extended to 31^st December 2016 due to demonetization.

Claim Status in our village

For the above-said villages, the insurance claims for the loss of Paddy crop was settled in the month of September 2017. For making this happen, I had to send a legal notice to the New India Assurance Co. Ltd, followed by that I also had to make a personal visit to the Department of Statistics, Tamil Nadu to put pressure on them to submit the crop loss details to the insurance company at the earliest. However, still, the insurance company did not settle claims of 255 farmers for Black Gram crop. Now, I am following up with the insurance company through email. Recently they have replied that claims for the district of Villupuram are under the process and would be released soon. I hope they will release the claims this month.

Claim Settlement needs to be streamlined

If settling insurance claims will take more than a year, how come a poor farmer will insure his crop, how will the insurance company or for that matter the government will earn the confidence of the farmer especially the majority of small and marginal farmers? Central Government and State Government need to work seriously along with the empanelled insurance companies in order to streamline the collection of data about the crop loss in order to ensure that claim settlement happens timely. Otherwise, the farmers will lose faith in the Pradhan Mantri Fasal Bima Yojana and also will begin to suspect like few people already accusing the Government by stating that it is promoting crony capitalism by filling coffers of the insurance companies at the cost of public money.

I hope both the Government and Insurance Company will realize this in order to gain the faith of the farmers at least for the sake of vote (as the election is only a year away) and money respectively. I also seriously hope that the Government will make efforts to use the allocated Rs.13,000 crores in the 2018 Budget to the benefit of the farmer this time. 

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