Union Minister Announces Penalties for Crop Insurance Payment Delays

Union Minister Shivraj Singh Chouhan announced a 12% penalty for delayed crop insurance payments under PMFBY and discussed improvements in the scheme, including direct payments to farmers and expanded coverage.

In a recent Lok Sabha address, Union Minister for Agriculture & Farmers' Welfare and Rural Development, Shivraj Singh Chouhan, disclosed that insurance companies would face a 12 per cent penalty for delays in paying out claims under the Pradhan Mantri Fasal Bima Yojana (PMFBY). The penalty will be directly deposited into farmers' accounts. Chouhan pinpointed state government delays in releasing premium amounts as the primary cause of these payment delays and urged for prompt action. From the Kharif season onwards, the central government will immediately release its share to avert further delays and ensure timely payments.

Chouhan stated that the main issues causing payment delays include delayed premium release by state governments and disputes between insurers and state authorities. While addressing Lok Sabha, he highlighted the challenges faced by previous insurance programs, such as inadequate claims, low insured amounts, and slow settlements, which had led to widespread dissatisfaction among the farming community.

Expressing pride in PMFBY, Chouhan announced that the number of crop insurance applications has grown from 3.51 crore under previous schemes to 8.69 crore. The total insured amount now exceeds Rs 2.71 lakh crore, with farmers paying premiums of Rs 32,404 crore and receiving claims worth Rs 1.64 lakh crore. The scheme, which covers crops damaged by natural causes, has become voluntary and expanded its coverage area, benefiting 3.57 crore farmers. New measures have streamlined the process, reducing complications for farmers.

The PMFBY now features three models, with state governments choosing their preferred ones. Instead of blocks, Gram Panchayats are now used as the assessment units for more accurate loss compensation. At least four crop-cutting experiments per Gram Panchayat and mandatory remote sensing assessments for significant losses have been introduced. While Chouhan did not see the need for a review committee at this time, he welcomed suggestions from Lok Sabha members.

(With inputs from agencies.)