Govt modifies PMFBY norms

Crop insurance companies delaying claim payouts beyond two months from the prescribed will have to pay 12 per cent interest to farmers as the government on Tuesday modified operational guidelines of the Pradhan Mantri Fasal Bima Yojana (PMFBY).

Insurance firms, on the other hand, would get paid an interest of 12 per cent if State governments delay release of their share of subsidy beyond three months of the cut-off date or submission of requisition, an official statement issued here said.

The new operational guidelines come into force from the rabi season, which commences on October 1.

BusinessLine had earlier reported the government’s plan to use a carrot-and-stick policy to make its flagship crop insurance scheme more effective following widespread complaints about delays in claim settlements.

The modified guidelines, on a pilot basis, included perennial horticulture crops under the crop insurance scheme. While hailstorms, unseasonal and cyclonic rainfall would be considered for assessing post-harvest losses, natural fire, landslide, inundation and cloudburst have been included in localised calamities. Crop loss due to attack of wild animals will also be covered.

More time has been given for change of crop name for insurance. While it was possible till a month before the cut-off date, it can now be done two days prior to the deadline.