PMFBY: Govt plans to impose financial penalties to push agri crop insurance

Almost 30% or a third of the agriculture ministry's budget, is spent on premium for the PMFBY every year

More than two years after its formal launch, the Centre is planning to impose financial penalties on state governments, banks and insurance companies for violating the guidelines of the Pradhan Mantri Fasal Bima Yojana (PMFBY), including delay in claim settlement.

It is also looking to incentivise states that promptly pay their share of premium, disburse claims to farmers on time and use technology for crop cutting, officials said.
 

PMFBY is an yield-based programme, where farmers are charged two per cent for all kharif crops, 1.5 per cent for all rabi crops and five per cent for commercial and horticulture crops.