Budget 2018: Crop insurance scheme likely to get allocation of Rs 130 bn

The government is likely to increase in Budget 2018 the allocation for the Pradhan Mantri Fasal Bima Yojana (PMFBY) to Rs 130 billion for 2018-19 from Rs 107.01 billion for the current financial year, sources said.

The Union Budget for 2018-19 will be presented on February 1.

Under the upgraded crop insurance scheme PMFBY, launched early 2016, farmers pay a very nominal premium and get a full claim for the crop damage.

According to sources, the budget expection is that the allocation for the PMFBY would go up to Rs 130 billion for the next fiscal taking into account about 10 per cent likely increase in the sum insured.

While the Agriculture Ministry has demanded Rs 110 billion (Rs 11,000 crore) budget for the next fiscal for the flagship scheme, but the ministry is hopeful of getting more funds from the Finance Ministry considering the importance of the scheme.

For the current fiscal, the government had initially given a budget of Rs 90.0075 billion (Rs 9,000.75 crore) for the PMFBY. However, the additional requirement of Rs 17.01 billion (Rs 1,701 crore) was made through supplementary demands, taking the total allocation to Rs 107.01 billion for the scheme, sources added.

Total crop insurance claim for 2016-17 crop year (July- June) is estimated to be Rs 155 billion (Rs 15,500 crore). Already claims to the tune of Rs 133.61 billion (Rs 13,661 crore) have been reported, of which Rs 123.13 billion (Rs 12,313 crore) have been settled, according to official data.

As many as 5.70 crore farmers purchased the crop insurance policy PMFBY during the 2016-17 crop year.

Under the PMFBY, farmers' premium has been kept lower between 1.5-2 per cent for foodgrains and oilseed crops, and up to 5 per cent for horticultural and cotton crops.

There is no cap on the premium and 25 per cent of the likely claim will be settled directly in farmers' accounts.