Farmers in distress? Insurance companies pay just 17% of claims under schemes launched by Govt of India
Revealing this, a new e-book, “State of India's Environment 2017: In Figures”, released by CSE and “Down to Earth” magazine on the World Environment Day (June 5), says that the two insurance schemes of the Government of India -- the Prime Minister’s Fasal Beema Yojna (PMFBY) and the Restructured Weather-based Crop Insurance Scheme (RWBCIS), launched to “to enable farmers tide over chronic crop losses due to various calamities” have been of "little help to the distressed farmers.”
Quoting a new Ministry of Agriculture and Farmers’ Welfare report, the e-book says, under both the schemes, insurance claims to the tune of Rs 4,270.55 crore were made, of which only Rs 714.14 crore has been paid to the farmers as of March 2017.
Pointing out that 10 general insurance companies are offering crop insurance under PMFBY, launched in April 2016, the e-book reveals, it collected Rs 9,041.25 crore as premium during the kharif 2016 season. However, it paid just about Rs 570.10 crore of the total claims made, Rs 2,324.01 crore, which comes to just 25%.
The two schemes plan to cover 50% of the cropped area by 2019. Claiming a big success, the Government of India says, they have already cover 30 per cent of the cropped area, and are being implemented in 21 states. According to the e-book, close to 39 million farmers were covered under these schemes in the kharif season of 2016.
The e-book says, under the PMFBY, only one company, Universal Sompo GIC, operating only in Karnataka, has settled all the insurance claims. The rest have failed to achieve this level.
Four out of 10 companies mentioned in the report have not settled up to 75-100 per cent of insurance claims. IFFCO-TOKIO, which is operating in three states including drought-hit Maharashtra, is yet to pay over 86 per cent of the claims by March 2017, it adds.
Meanwhile, a Bank of America Merrill Lynch (BofA-ML) report has warned farm loan waivers would amount to 2% of gross domestic product (GDP) by the 2019 Lok Sabha polls, as other states are also likely to follow the BJP’s Maharashtra and UP governments.
BofA-ML estimates, the total amount of loan waiver would be to the tune of $40 billion, or Rs 2,57,000 crore in the run-up to 2019 general elections in the country. The states which have already announced loan waiver include Maharashtra, Uttar Pradesh, Tamil Nadu, Telangana, Andhra Pradesh, among others.
The two schemes plan to cover 50% of the cropped area by 2019. Claiming a big success, the Government of India says, they have already cover 30 per cent of the cropped area, and are being implemented in 21 states. According to the e-book, close to 39 million farmers were covered under these schemes in the kharif season of 2016.
The e-book says, under the PMFBY, only one company, Universal Sompo GIC, operating only in Karnataka, has settled all the insurance claims. The rest have failed to achieve this level.
Four out of 10 companies mentioned in the report have not settled up to 75-100 per cent of insurance claims. IFFCO-TOKIO, which is operating in three states including drought-hit Maharashtra, is yet to pay over 86 per cent of the claims by March 2017, it adds.
Meanwhile, a Bank of America Merrill Lynch (BofA-ML) report has warned farm loan waivers would amount to 2% of gross domestic product (GDP) by the 2019 Lok Sabha polls, as other states are also likely to follow the BJP’s Maharashtra and UP governments.
BofA-ML estimates, the total amount of loan waiver would be to the tune of $40 billion, or Rs 2,57,000 crore in the run-up to 2019 general elections in the country. The states which have already announced loan waiver include Maharashtra, Uttar Pradesh, Tamil Nadu, Telangana, Andhra Pradesh, among others.
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