Government of India has constituted a working group with the objective of launching the overhauled Pradhan Mantri Fasal Bima Yojana (PFMBY) from Kharif season, 2022.
This working group has been constituted comprising officials of the Centre, top officials of public sector insurance companies and major crop-producing states.
This working group will make useful suggestions about “sustainable, financial and operational models”.
After many states of India abandoned this scheme, this working group was formed, otherwise the objective of protecting the income of farmers could have been defeated.
The Working Group is expected to address the demand for an alternative model to reduce the subsidy burden on the Government of India, to achieve sustainable capacity of insurers as well as to achieve reasonable premium prices. This working group will submit its report in the next six months.
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The major issues affecting PFMBY during the implementation of the said scheme, setting up of this working group, tightening of premium market, inadequate underwriting capacity of insurers and lack of adequate participation in tenders.
Under this scheme, farmers are required to fix a premium of 1.5% of the sum insured for Rabi crops and 2% for Kharif crops. It is 5% for cash crops under PFMBY. The remaining premium is divided between the Center and the states.
