Govt likely to allocate Rs 15,500 crore for crop insurance for FY24 | The Financial Express

Govt likely to allocate Rs 15,500 crore for crop insurance for FY24

Punjab, which has not adopted the crop scheme launched in 2016, is in discussion with the agriculture ministry to launch the scheme from kharif 2023 in the state.

Govt likely to allocate Rs 15,500 crore for crop insurance for FY24
PMFBY is currently being implemented in 21 states/union territories. Ten insurance companies both the public and private sectors, are implementing the crop insurance scheme.

The Union Budget is likely to allocate around Rs 15,500 crore for the implementation of Pradhan Mantri Fasal Bima Yojana (PMFBY) for next financial year same as the budget estimate for 2022-23, despite a spike in expenses.

Sources said the anticipated expenses for the centre for implementation of PMFBY in current fiscal would be around Rs 19,000 crore against the budget estimate of Rs 15,500 crore, while there are around Rs 6000 crore of ‘unspent balance’ in the corpus of the scheme from the previous year.

“With a similar level of allocation for 2023-24 like the current fiscal, it would be adequate for implementation of the crop insurance scheme,” an official told FE.

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The premium to be paid by farmers under the crop insurance scheme is fixed at just 1.5% of the sum insured for rabi crops and 2% for kharif crops, while it is 5% for cash crops.

The balance premium is equally shared among the Centre and states, which implies they bear most of the premium under the scheme. In the case of the north-eastern states, the premium is split between the Centre and states in a 9:1 ratio.

PMFBY is currently being implemented in 21 states/union territories. Ten insurance companies both the public and private sectors, are implementing the crop insurance scheme.

In the last six years, Rs 25,186 crore have been paid by farmers as the premium, wherein Rs 1.26 trillion have been paid to the farmers against their claims as on October 31, 2022, according to an agriculture ministry statement last week.

States such as Andhra Pradesh, Telangana, Bihar, Jharkhand, West Bengal and Gujarat had dropped out of the scheme because of the high costs. However, Andhra Pradesh re-joined the crop insurance scheme from kharif 2022. Officials said that talks are on with Telangana and Jharkhand, who are expected to re-join the scheme soon. Talks with the Gujarat government for implementation of PMFBY will be held after the new government takes office in the state.

Punjab, which has not adopted the crop scheme launched in 2016, is in discussion with the agriculture ministry to launch the scheme from kharif 2023 in the state.

Meanwhile , the government would soon introduce restructured PMFBY for expanding the base of insurance coverage amongst farmers and ensure quick settlements of claims.

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First published on: 05-12-2022 at 03:15 IST