PMFBY unlikely to be implemented in Telangana

State govt. and Centre not releasing their premium share

June 21, 2020 11:03 pm | Updated June 22, 2020 08:13 am IST - HYDERABAD

The Pradhan Mantri Fasal Bima Yojana, the flagship crop insurance scheme launched all over the country in the kharif of 2016, is as good as over in Telangana because the State government was said to be of firm belief that the outgo from its side to the participating insurance companies was in hundreds of crores while the claims paid to farmers was much less.

The government was credited with the view that there was no point in implementing the scheme after it was revamped earlier this year to make enrolment 100% voluntary for all farmers from ongoing kharif. This would drastically reduce the strength of the insured. Also, the government firmly believed that it was spending up to ₹41,000 crore annually on agriculture, including ₹14,000 crore on Rythu Bandhu, ₹6,225 crore on loan waiver, ₹11.000 crore on irrigation and ₹10,000 crore on free power, in the total State budget of ₹1.82 lakh crore. So, the scheme could be given a miss considering that it was also the demand of farmers for a long time seeking exemption from joining it compulsorily for availing crop loans, said a senior officer.

The PMFBY was until now a voluntary scheme for non-loanee farmers. In the case of loanee farmers, banks deducted their share of premium (2 to 5%) against loan accounts on compulsory basis and remitted the same to insurance companies. The balance 95 to 98% was shared by the State and Central governments in 50:50 ratio.

In these circumstances, the State government which was supposed to invite tenders from insurance companies in May for implementation of the scheme backed out. After the tenders were finalised, the government used to notify premium amounts for different crops which banks deducted from the loans payable to farmers. This year, however, the banks will remit the full loan amount under the revamped guidelines. The scheme had taken off well in the State in the launch year of 2016-17 and the next year but 2018-19 and 2019-20 saw the State government not releasing its share of premium. As a result, the Centre also did not release the matching sum and, therefore, the insurance companies failed to meet the claims of farmers amounting to ₹960 crore (₹410 crore for 2018-19 and ₹550 crore for 2019-20). The State and Central governments were to share the premium amount payable to the companies in the two years to the extent of Rs.413.50 crore each but failed.

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