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The Maharashtra government is all set to launch its own crop insurance scheme, alleging that the insurance companies participating in Pradhan Mantri Fasal Bima Yojana (PMFBY) are reaping financial benefits while farmers paying crop insurance are left high and dry.

However, the union government has stated that the major reason for pending claims is the non-receipt of the State government share in premium subsidy.  

During the ongoing Maharashtra Assembly Session, Deputy Chief Minister Ajit Pawar, while presenting the annual budget, referred to the crop insurance scheme and complaints raised by farmers. While answering the budget discussions, Pawar told the State Assembly that farmers have repeatedly complained about the majority of companies involved in PMFBY. He said that Maharashtra Chief Minister, State Agriculture Minister and Chief Secretary have already discussed the issue with the union government. Pawar said that Gujarat has started its own crop insurance scheme; Maharashtra wants to take a similar step and needs the union government’s approval.

According to Pawar, if a farmer pays an installment of ₹1,000 for crop insurance, he receives about ₹400-450 as insurance claim after crop loss. 

Pawar and leaders of the ruling Shiv Sena, Nationalist Congress Party, and Congress alleged that the insurance companies involved in PMFBY are reaping benefits of the scheme and farmers are not getting timely insurance claims. 

The union government’s stand 

According to the union government’s data, since the inception of the scheme in Maharashtra to 2020-21, the total premium received by the companies operating in Maharashtra is ₹27,698.07 crore while claims reported are of ₹19,906.42 crore. Out of ₹19,838.65 crore claims approved, claims of ₹19,633.47 crore are paid. Claims of about ₹272.95 crore are pending against the claims reported.

The Minister of Agriculture and Farmers Welfare Narendra Singh Tomar told Lok Sabha last month that the major reason for pending claims is the non-receipt of State government share in premium subsidy. He was answering the question on PMFBY in Maharashtra.

The PMFBY is voluntary for states and Maharashtra has been implementing the scheme since its inception in 2016-17. Claims are worked out and settled by the insurance companies as per provisions of the scheme said the Minister.

Reasons for delayed payments 

The union government claims that admissible claims under the PMFBY are generally paid by the concerned insurance companies within two months of completion of Crop Cutting Experiments (CCEs)/harvesting period and one month of notification for invoking the risks/perils of prevented sowing, mid-season adversity and post-harvest losses. This is subject to receipt of the total share of premium subsidy from the concerned government within time. 

 “However, settlement of few claims in some States, including Maharashtra, got delayed due to reasons like delayed transmission of yield data, late release of their share in premium subsidy, yield-related disputes between insurance companies and States, non-receipt of account details of some farmers for transfer of claims to the bank account of eligible farmers and National Electronic Fund Transfer (NEFT) related issues,” the Minister stated in a written reply to the Lok Sabha.

Erroneous and incomplete entry of individual farmers data on National Crop Insurance Portal (NCIP) and delay in remittance of farmers share of premium/non-remittance of farmers’ share of the premium to the concerned insurance company are also some of the reasons for delayed payment, according to the government. 

Published on


March 18, 2022

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