he government is working on delinking the premium contribution by the central government and states under the Pradhan Mantri Fasal Bima Yojana (PMFBY) and has directed the insurance companies to issue the policy and process at least 70 percent of the claim even if there is a delay in receiving the states’ contribution of the premium, an official said.
The move is aimed to address the late disbursement of claims to farmers under PMFBY.
“The government is trying to desegregate the farmer, state and Centre’s share of premium under PMFBY. The policy is not issued till the state and Centre’s share of the premium gets credited to the insurance company. Eligibility of claim arises only after that. The government is thus delinking the Centre and states’ share of the premium,” the official told Moneycontrol.
The premium split
The premium for the scheme is heavily subsidised, with the central and state governments sharing the major portion of the premium burden. The subsidy ratio is typically 50:50 between the central and state governments. For North Eastern and Himalayan states, the ratio is 90:10. Farmers pay a nominal premium rate under the scheme – 2 percent for Kharif crops, 1.5 percent for Rabi crops and 5 percent for commercial and horticultural crops.
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