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A Parliamentary panel pulled up the government for delay in settlement of claims under the Pradhan Mantri Fasal Bima Yojna (PMFBY) and suggested it to make the scheme more technology-driven and farmer-friendly. PMFBY is being implemented in the country from the Kharif season of 2016 through five public and 13 private sector general insurance companies.
Strict action against defaulting insurance companies
The Parliamentary Standing Committee on agriculture headed by P C Gaddigoudar in its 29th report on PMFBY placed in the Lok Sabha also suggested the union agriculture ministry take action against the defaulting insurance companies within a timeframe.
“The Committee feels that delay in settlement of claims is not acceptable in any way and therefore, strongly recommend the department (of agriculture) to make the scheme more technology-driven,” the report said.
In the absence of any time frame within which the claims are to be settled by the insurance companies, farmers are left at their mercy and the lengthy court procedures add to their miseries, it added.
The Committee, therefore, recommends that a timeline be fixed for insurance companies to settle their claims and in case of non-adherence to the timelines the insurance companies be penalized.
For penalty on insurance companies, the committee said that the government has informed that it had imposed penalties on some of the insurance firms and the defaulting firms have been asked to pay fines of Rs 22.17 crore for the crop season up to rabi 2017-18. The Centre also added that it can enforce the penalty only after receiving the data from the state governments.
However, the panel said that “the delay on account of procedural aspect in taking action against the defaulting insurance companies renders all this exercise infructuous.”
The committee recommended the government to take action against the defaulting companies so as to make sure that the whole process of penalization is completed within a fixed timeframe, the report added.
It also asked the government to prepare a time-frame and strictly adhere to the timelines for performance evaluation of insurance companies on regular basis.
Committee suggests provisions for states
The committee further asked the government to properly look into the factors leading to the withdrawal or non- implementation of the scheme by Punjab, Bihar, West Bengal, Andhra Pradesh, Gujarat, Telangana and Jharkhand and to initiate suitable steps.
The panel also suggested the government to ensure that all the institutional mechanism works in tandem so that registration of farmers, conducting of crop cutting experiments (CCEs), settlement of claims, etc becomes hassle free and farmer-friendly.
It further recommended that when the reason for delay is non-payment of subsidy by the state, the premium paid by the farmers be returned along with interest within a fixed time frame.
The committee also suggested the government suitably modify two provisions of the ‘Revamped Operational Guidelines’ so that states do not withdraw from the scheme.
These two provisions include (a) states delaying the release of subsidy beyond stipulated timelines can’t participate in upcoming seasons; and (b) the requisite central share of premium subsidy will be provided for areas or crops having gross premium rate up to 25% for irrigated and up to 30% for un-irrigated areas or crops and the states have to bear the entire subsidy for areas or crops having gross premium rate over and above this.