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Insurance firms earn Rs 15,795 crore under PMFBY in 2 years: Haryana-based RTI activist

Prime Minister Narendra Modi had unveiled the crop insurance scheme against loss on account of natural calamities, in January 2016. As per the scheme, the farmers have to pay 2 per cent of the premium for Kharif crops, while 1.5 per cent for Rabi crops, while balance is paid by the state and Centre.

Insurance companies have earned a profit of Rs 15,795 crore in the past two years under PMFBY. (Representational)

A Haryana-based RTI activist, P P Kapoor, has claimed that insurance companies have earned a profit of Rs 15,795 crore in the past two years (2016-17 and 2017-18) under Pradhan Mantri Fasal Bima Yojana across the country.

However, while sharing the information to Kapoor under Right to Information (RTI) Act on October 14, the Union Ministry of Agriculture and Farmers’ Welfare had made it clear that the majority of claims for the Rabi crop of 2017-18 were yet to be finalised or approved by the insurance companies.

“In two years (2016-17 and 2017-18), the insurance companies collected insurance premium of Rs 49,408 crore for 10.6 crore farmers and distributed Rs 33,612.72 crore to 4.27 crore farmers, while earning a profit of Rs 15,795.28 crore. The insurance companies had earned a profit of Rs 6,459.64 crore in 2016-17, while the margin went up to Rs 9,335.62 crore in 2017-2018,” said Kapoor in a press release Tuesday, quoting the RTI figures.

Prime Minister Narendra Modi had unveiled the crop insurance scheme against loss on account of natural calamities, in January 2016. As per the scheme, the farmers have to pay 2 per cent of the premium for Kharif crops, while 1.5 per cent for Rabi crops, while balance is paid by the state and Centre.

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The Union Ministry of Agriculture and Farmers Welfare had authorised about a dozen private insurance companies, apart from a few public sector firms, under the crop insurance scheme.

“In Haryana, the insurance companies collected a premium of Rs 364.39 crore for 13.36 lakh farmers and distributed Rs 292.55 crore as compensation in 2016-17, earning a profit of Rs 71.84 crore. Likewise, Rs 453 crore were collected as premium for 13.51 lakh farmers in 2017-18 and distributed Rs 358 crore as compensation, earning a profit of Rs 95 crore,” Kapoor added.

Haryana government officials have told The Indian Express that the compensation amount to the farmers would be much higher after disbursement.

Haryana government’s consultant for the crop insurance scheme Dharam Sharma said, “In Haryana only, total Rs 890 crore compensation amount has been approved for three out of total four crop seasons in the last two years (2016-18). Some portion of the compensation amount is yet to be disbursed to the farmers. The compensation disbursement got delayed because a private insurance company had challenged the claim assessment of the government officials.”

Haryana Agriculture and Farmers Welfare Minister Om Prakash Dhankar claimed the scheme has rather proved beneficial to the farmers.

“Almost five lakh farmers have been given compensation under the scheme in Haryana,” said Dhankar who was a national president of BJP Kisan Morcha.

Kapoor, however, told The Indian Express, that instead of giving thousands of crores to the insurance companies as premium, the government should have given this much money to the farmers as compensation directly Punjab has not opted for the Pradhan Mantri Fasal Bima Yojana.