Tatsat Chronicle Magazine

How PMFBY Ensured Windfall Gains Of 350% For Insurance Companies

When the Pradhan Mantri Fasal Bima Yojana was launched, it was touted as a security cover for India’s farmers, who employ the largest workforce and provide food security. Instead, the scheme has turned into a money-making machine for insurance companies in the past seven years
July 31, 2023
Destroyed harvest
Destroyed harvest: For farmers like Avinash Kumar, informing the authorities of crop damage within 72 hours is a major challenge due to poor phone connectivity (Photo: SPECIAL ARRANGEMENT )

Nirmal Prajapat from Churu, Rajasthan, claims that farmers like him face an uphill task when claiming the amount payable to them under the Pradhan Mantri Fasal Bima Yojana (PMFBY). In most cases, he says, they are forced to resort to protest demonstrations to secure compensation even as the vagaries of nature continue to destroy standing crops. Avinash Kumar, a farmer from Bihar’s Nawada district, complains of phone connectivity problems in his area, making it extremely difficult for farmers to inform the nearest agriculture officer or the nearest CSC Centre via a call or through the Crop Insurance App within 72 hours of suffering crop damage as mandated by the scheme. Others point out the difficulty in operating the app to file intimation of crop damage within the stipulated period.

Meanwhile, insurance companies are raking in huge windfall gains with claim disbursement consistently falling over the past few years (see Graph 1), according to government data placed in Parliament during the Monsoon Session.The gains made by insurance companies increased from less than ₹5,000 crore in 2019-20 to a whopping more thanr ₹22,000 crore in 2022-23 (see Graph 2). Since February 2016, when Prime Minister Narendra Modi launched his showpiece scheme for the agriculture sector, insurance companies have raked in a whopping windfall of ₹57,379.09 crore. In other words, the insurance sector has made gains in excess of 350% in the past seven years.

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Jayanta Bhattacharya

Journalist. Curious about astronomy, cinema, communications, digital media, geostrategy, human rights, military, tech, and nature.