The PM Fasal Bima Yojana needs an urgent revamp

-The Hindu Business Line

The main grouse that States have with PMFBY is that while premiums are distributed evenly across participants, claims are cornered by a few

Six years after its launch and post multiple overhauls, Pradhan Mantri Fasal Bima Yojana (PMFBY), India’s flagship scheme for crop insurance, has largely failed to deliver on its objectives. An expert committee steered by Ashok Dalwai recently submitted a report showing that, between 2016 and 2021, PMFBY saw a decline in participating farmers (362 lakh to 248 lakh) and States (22 to 19), with shrinking coverage (474 to 387 lakh hectares), despite a sharp rise in premiums.

PMFBY offers farmers compensation for crop losses arising from non-preventable risks such as drought, floods, pest and disease attacks. Premiums for insured clusters are discovered through a bidding process. Farmers are expected to make only nominal premium payouts (1.5 to 2 per cent); the bulk of the premium is shared equally between the Centre and States. But with farmers complaining of uncertain claims payouts, States dropping out and the Centre seeing limited results on the ground despite rising budgetary allocations, PMFBY is in urgent need of an overhaul.

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