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The general insurance industry today hailed the Union Budget and welcomed the government's decision to increase the coverage under the Pradhan Mantri Fasal Bima Yojana from 30 per cent to 40 per cent in 2017-18 and 50 per cent in 2018-19.
The government has increased its spending on PMFBY to Rs 13,240 crore, which the industry believes will help bring more farmers under the insurance cover.
"Indian farmers need risk mitigation mechanism in the form of insurance and PMFBY will compensate them whenever they suffer crop loss during natural disasters," New India Assurance CMD G Srinivasan said.
New India has underwritten premium of Rs 1,100 crore under the scheme in the current fiscal so far and it plans to increase it to Rs 2,000 crore in the next financial year.
"The increase in insurance cover under PMFBY will result in increase in premium by 15-20 per cent by the industry in the next fiscal," National Insurance chairman and managing director, Sanath Kumar said.
ICICI Lombard MD & CEO, Bhargav Dasgupta said, "This government has done more to promote insurance as a risk mitigation tool and the decision to increase the coverage under the Pradhan Mantri Fasal Bima Yojana to cover 40 per cent of crop area is a continuation of that approach.
"The budget aims at continuing with the government's agenda of pursuing an inclusive and long-term development of the economy by focusing on the core enablers, including infrastructure, digitisation, rural development, among others. New initiatives, such as a proposed model on contract farming are a welcome move," he said.
"With a view to boost the agricultural sector, the government has increased the coverage under the Pradhan Mantri Fasal Bima Yojana from 30 per cent to 40 per cent in 2017-18 and 50 per cent in 2018-19 which will help farmers get insured," M Ravichandran, President - Insurance, Tata AIG General Insurance said.
Farmers will also benefit further with the government spending Rs 13,240 crore in fiscal 18 on crop insurance, he added.
Swiss Re, which has recently opened its India branch, believes that it's a positive move to close the protection gap in agriculture
"Increasing allocations for Fasal Bima Yojana and targeting greater insurance coverage is a positive move to close the protection gap in agriculture," Swiss Re India branch chief executive Kalpana Sampat said.
"A robust crop insurance framework is an important stepping stone towards food security and financial stability for farmers," she added.