GOVERNMENT CONSTITUTED PANEL TO REVAMP PRADHAN MANTRI FASAL BIMA YOJANA (PMFBY)
• With several states quitting the scheme, government has now constituted a working group to suggest sustainable, financial and operational models.
• Implementation challenges faced in PMFBY
> Many States are deciding to quit PMFBY as State's have to provide higher share of premium after centre capped its subsidy share. Earlier, centre slashed its share of premium subsidy from 50% to 25% in irrigated areas and 30% for un-irrigated areas.
> Hardening of premium market and lack of sufficient participation in tenders.
> As number of farmers will go down (centre making scheme voluntary), premium rates will increase and state governments will have to fill the gap.
> Insurers admitting less of farmer's claims and delays in settlement of claims.
PMFBY provides voluntary comprehensive crop insurance from pre-sowing to post-harvest period against non-preventable natural risks at premium rate of:
> 2% for kharif crops.
>1.5% for rabi crops.
> 5% for horticulture and commercial crop.
Intended beneficiary: All farmers including sharecroppers and tenant farmers growing notified crops in a notified area (unit of insurance decided by state government). Earlier it was mandatory for the loanee farmers.