The government’s move to roll out the Pradhan Mantri Fasal Bima Yojana (PMFBY) from the ongoing kharif season has got a boost with 18 agriculturally critical states, including Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Uttar Pradesh, Karnataka, Odisha and Maharashtra, having floated tenders to identify insurers who will offer the scheme to farmers.
According to agriculture ministry data, Rajasthan has completed the bidding process for identifying insurance companies from the 11 identified insurance providers comprising both public and private sector companies. Jammu and Kashmir will open its bids on July 27. The states need to complete the bidding process to identify insurance providers and types of the crops to be insured through fixing the ‘scale of finance’ for each crop by the end of July.
However, eight states, Punjab and the North-Eastern states, have not taken necessary measures for rolling out the mega crop insurance scheme which had reduced the premium to be paid by the farmers to 2% of the insured value for the more rain-dependent kharif crops like paddy, pulses and oilseeds and 1.5% for the rabi season, compared with 3.5-8% under the previous schemes. The premium for annual commercial and horticultural crops will be capped at 5%.
An agriculture ministry official told FE that those states which have not rolled out revamped crop insurance in the ongoing kharif season would be encouraged to take crop insurance in the next rabi season.
The Centre has named state-owned Agriculture Insurance Company of India (AIC) and 10 private companies for implementation of the mega scheme.
Meanwhile, many drought-hit states have increased the allocations under PMFBY significantly. Maharashtra has allocated a higher amount of R1,855 crore in the 2016-17 Budget for PMFBY, while only R725 crore was earmarked in 2015-16. Madhya Pradesh has allocated R1,898 crore for the next fiscal for the crop insurance which is substantially higher from the current fiscal. Karnataka, UP and Odisha too, have increased allocations for the crop insurance.
For PMFBY, finance minister Arun Jaitley had allocated R5,501 crore in 2016-17 while R2,995 crore was allocated for various crop insurance schemes in the last fiscal. The major subsidy burden for rolling out crop insurance would be borne by both the states and the Centre.