The Indian union cabinet has cleared the revamped versions of its two-flagship crop-insurance schemes to mitigate growing climate risks for the Indian farmers. The government has also extended the duration of these two crop insurance schemes - Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) - for one more year till 2025-26. A total budget of INR695158m has been allocated for these two schemes.
The government has also created a separate fund for Innovation and Technology (FIAT) with an outlay of INR8248m for technology infusion in the implementation of these flagship insurance schemes. The FIAT fund will promote the use of technology for faster assessment, faster claim settlement and lesser disputes.
Under the crop insurance scheme if an insurance company delays compensation to a farmer, it would have to pay 12% additional interest. Out of over 80m claims received from the farmers under the scheme last year, over 40m farmers were benefitted.
The overall Centre-state funding pattern for the PMFBY remains unaltered at 90:10 for northeastern and hilly states, while it is 50:50 for other states. Farmers under the scheme pay a pre-defined premium share of 1.5%-5% of the insured value.
According to government data while INR340,000m was collected from farmers under the scheme, and INR17,00,000m were disbursed to them as claims to the farmers.
Government sources said the assessment of crop damage would now be done through remote sensing now for which the funds allocated to FIAT will be made use of.
The major initiatives that the FIAT will take up include:
- Yield estimation system using technology (YES-TECH), which uses remote sensing for crop yield estimates with a minimum 30% weightage to technology-based yield estimates.
- Weather information and network data system (WINDS) for augmenting weather data through automatic weather stations.
- Implementation of WINDS to assist state governments.
Source - Asia Insurance Review
