Modi’s crop insurance scheme loses charm as coverage area cut short

Modi’s crop insurance scheme, which was launched with much hullabaloo two years ago, loses charm as coverage area cut short. The Central government’s flagship scheme has its coverage reduced to 24% of gross cropped area (GCA) in 2017-18 from a 30% in 2016-17. This indicates a negative growth as the actual target for the current year was 40%.

The number of farmers insured during both the kharif and rabi seasons also shows a downward trend with a 14% this year. After the Pradhan Mantri Fasal Bima Yojana (PMFBY) launched February 2016, the coverage area touched a 30% growth in 2016-17, from a 23% under the old schemes a year ago. In 2017-18, the area insured under PMFBY was 47.5 million, which means a 24% of the GCA.

According to the government's estimates, the coverage in 2017-18 should have increased to 40%. This decline in coverage shadows the government's final target of achieving a 50% of the GCA under the PMFBY in 2018-19. The Union budget has even allocated Rs 13,000 crore for this. The scheme makes the farmers pay just 2% of the total premium in case of the kharif crop, 1.5% for rabi and 5% for horticulture. The remaining premium will be equally shared by the Centre and the states.

While the centre accuses the states of poor implementation of the scheme, the states put the blame on private insurance companies who bid for more profit and cause a delay in settlement of claims. The scheme has an enthusiastic response only in states like Telangana and Tamil Nadu, whereas received a lukewarm response in Maharashtra, Gujarat, Chhattisgarh, and Uttar Pradesh.

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