Jharkhand and Telangana became the recent states to opt-out of the Pradhan Mantri Fasal Bima Yojana. Several states like West Bengal, Bihar, Punjab and Andhra Pradesh have already left the scheme. The scheme wanted the farmers to pay 2% of the total premium for the Kharif crops 1.5% for the rabi crops and 5% for cash crops and the rest was borne by the government. The scheme replaced the National Agricultural Insurance Scheme (NAIS) and the Modified National Agricultural Insurance Scheme(MNAIS).
The scheme has not been successful and the recent data suggest that there may be a 25% decline in enrollment. The implementation of this scheme has seen a lot of problems. Firstly, the states have the option to voluntarily join the scheme. Many states have opted out of the scheme because their share of the premium is high which spoils their budget. Secondly, the Central Government in February this year decreased its contribution to the scheme to 25% from 50% in irrigated areas and 30% in unirrigated areas. This has put a burden on the states to provide the majority of the premium.
Furthermore, farmers have been complaining of not getting their insurance claims on time and the lack of communication between the farmers and insurance companies. They claim that the insurance companies have made a lot of windfall gains through this scheme.
Insurance companies have also not invested a lot in rural infrastructure so a lot of farmers are not aware of the schemes. A report by the Comptroller Auditor General of India in 2017 found that two-thirds of the farmers were unaware of the scheme. “Despite the provision of a large amounts of funds under the schemes to private insurance companies, there was no provision for audit by the Comptroller and Auditor General of India (even though WBCIS provided for oversight agency by an independent government agency)”.
So there should be a mechanism made for timely payment of claims and a clear line of communication should be established involving the farmers, government, insurance companies to improve this scheme.
