Government has introduced several rules tightening its flagship farm insurance scheme – the Pradhan Mantri Fasal Bima Yojana (PMFBY). According to one of the new rules that will take effect on 30th November, farmers’ claims not cleared by insurance companies in two months of harvest will be ‘automatically approved’.
As with any insurance policy, the claims should be approved by insurance companies for policyholders to get compensation.
Now with the new rule, insurance companies will not be able to verify claims or perform any further checks to determine the validity of farmers’ claims, if they don’t do it within two months. An official told that “Beyond the 2-month limit, all claims will be auto approved by the PMFBY website”.
With this new guideline, the government hopes to handle the main reason of farmers anguish concerning the scheme - delayed payments. When farmers don’t get insurance payments on time in one season, it affects their ability to spend in crops for the next season.
Further, to make this ‘auto approval feature’ operational, the centralized website governing the farm-insurance programme has been updated with an in-built feature.
One of the key changes in the scheme is that participating insurance firms will now have to spend 0.5 percent of the gross premium collected on spreading ‘awareness about the scheme among farmers’. The State governments will also have to give 2 percent of their annual budget to a slew of procedures tied to the insurance programme like administrative expenses to accelerate processing of claims. This 2 percent allocation will also go towards meeting costs for yield and loss assessment. It will also be used to buy smart phones through which yield losses will be estimated.
An economist with the think-tank ICRIER, Ashok Gulati says if the PMFBY scheme wants to attain its most important goal i.e. timely payouts to farmers, it cannot go without a push of high-end technological fixes - from drones to a new constellation of satellites for correct crop damage assessments.
Earlier, the government had decided to smack a 12 percent interest on insurance firms for delay of more than 2 months in claim settlement.
