Ministry of Agriculture & Farmers Welfare

Timely Settlement of Claims under PMFBY

Posted On: 18 SEP 2020 3:16PM by PIB Delhi

Delay in release of share in premium subsidy by some States/UTs is one of the main reasons for delay in settlement on claims under Pradhan Mantri Fasal Bima Yojana (PMFBY). 

The Operational Guidelines of PMFBY envisage timely release of State Government share in premium subsidy to ensure timely settlement of claims.  However, settlement of claims have been delayed due to delays in release of their share by some States like Assam, Bihar, Andhra Pradesh, Telangana, Madhya Pradesh, Rajasthan, West Bengal, Gujarat etc. in one or more season.

This Department is regularly monitoring the implementation of PMFBY including timely settlement of claims through one to one/weekly meetings and weekly video conference with all stakeholders.   Defaulting States/UTs are also being asked in writing from time to time to release their respective share in premium subsidy.   Moreover, provisions of penal interest @12% were made in the Revised Operational Guidelines for delay in release of their share in premium subsidy by States/UTs. Further, as per revamped guidelines w.e.f. Kharif 2020, the states delaying the release of subsidy beyond stipulated timelines cannot participate in upcoming seasons.

After detailed discussions with stakeholders, Government has recently approved the revamping of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) for implementation from Kharif 2020 season.  Changes made in the provisions/parameters of these schemes are Annexed.

To increase the coverage under the PMFBY, the Operational Guidelines of the PMFBY provides for creation of awareness among farmers.  Accordingly, Government has taken several initiatives including active involvement of all stakeholders especially States, implementing insurance companies, financial institutions and Common Service Centre (CSCs) network for conduct of publicity campaign/ awareness programmes including organization of camps in the rural areas to build farmer awareness about crop insurance schemes.  Since, the scheme has been made voluntary for all the farmers from Kharif 2020, the behavioral change communication activities were also conducted through various media tools viz Print, electronic, Digital and Social Media etc.  Mobile Information, Education and Communication (IEC) vehicles were used to motivate farmers during enrollment campaign carried out for Kharif 2020 at grass root level. 

As enshrined in the Operational Guidelines of the scheme, insurance companies have been asked to mandatorily utilize 0.5% of gross premium collected by them for IEC activities at grass root level to build overall insurance literacy of farmers to take informed decisions. 

Apart from this, other activities for awareness generation involve the publicity of features and benefits of the scheme through advertisements in leading National / local News Papers, telecast through audio-visual media, distribution of pamphlets in local languages, participation in agriculture fairs / mela / goshti, dissemination of SMS through Kisan Portal / national crop insurance portal and conduct of workshops/ trainings of State officials, financial institutions and farmers.

The integration of crop loss intimation feature in Crop Insurance App has been facilitating farmers to intimate their crop loss due to localised calamity within the prescribed time limit.  

The Government has also produced a series of audio-visual material on key features of PMFBY and promoted through a dynamic social and digital media campaign during the lockdown period due Covid-19.

Due to these efforts made by the Central Government, State Governments and other stakeholders coverage under the scheme has been increased to 30% of the Gross Cropped Area (GCA) from 23% in 2015-16 under erstwhile schemes.  Participation of non-loanee farmers have also increased from 5% under erstwhile schemes to 37% under PMFBY. These awareness activities also leads to following qualitative and quantitative changes in all stakeholders including farmers in most of the implementing States especially in Tamil Nadu, Maharashtra, Chhatisgarh, Karnataka, Madhya Pradesh, Haryana, Odisha, Andhra Pradesh, Rajasthan etc. :


  • Increased awareness level of farmers and other stakeholders about channels and procedure of enrolment, risks covered, premium rates of different crops, procedure for reporting claims, and claim settlement.


  • Increased coordination and Synergy between State Government, banks, CSCs, Panchayti Raj Institutions and the respective Insurance Companies.


  • Increased awareness amongst farmers on doubts and myths about the Scheme.


  • Ensured retention of loanee farmers in the Scheme especially in complete voluntary regime from Kharif  2020.


  • Effective implementation of Grievance Redressal Mechanism within stipulated time frame.


  • Increased level of farmers trust in the PMFBY


  • Created large number of opinion makers and master trainers through online training at grass root level to ensure continuous sensitization of farmers.


  • Effective use of social and digital media to disseminate key features of PMFBY amongst online community and other stakeholders


This information was given in a written reply by the Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar in Rajya Sabha today.








Changes made in the provisions/parameters of PMFBY and RWBCIS w.e.f. Kharif 2020 season


  • To address the demand of farmers, the scheme has been made voluntary for all farmers. However, there is no change in farmers’ share of premium.


  • The premium subsidy sharing pattern between Centre and North Eastern States has been changed from 50:50 to 90:10.  This has been done to allow more States to notify the scheme and existing States to notify more crops and areas to facilitate greater coverage of farmers under the scheme.  For remaining States, subsidy sharing pattern will continue as 50:50.


  • To address the issue of high premium rate for few crops/areas due to adverse selection, the requisite central share of premium subsidy (90:10 for North Eastern States and 50:50 for remaining States) will be provided for areas/crops upto gross premium rate of 25% for irrigated and 30% for un-irrigated areas/crops. Besides, alternate risk mitigation measures will be explored for these areas/crops.


  • Insurance companies will now be selected by the States for 3 years in a go instead of one year thereby increasing their commitment and accountability to the farmers.


  • Option has been given to the States to choose the notional value of average yield or the Scale of Finance as sum insured in the interest of the farming community.


  • In view of the demand of many states, option has been given to states to choose additional risk covers besides shortfall in yield-based cover depending upon the local weather challenges and requirements of the farmers.


  • The states delaying the release of subsidy beyond stipulated timelines can not participate in upcoming seasons.


  • Two-step process of crop yield estimation using weather and satellite indicators etc. is adopted, which will help in early assessment of loss


  • Use of smart sampling technique through satellite data for crop cutting experiments by some states has shown increased efficiency in implementation. This will now be universalized.


  • The delay by some States in submission of crop yield data will now be suitably addressed using technological solutions.


  • Provision has been made for earmarked administrative expenses @ 3% for strengthening the infrastructure and technology usage for better delivery of the Scheme.


  • Insurance companies have been asked to mandatorily utilize 0.5% of gross premium collected by them for IEC activities at grass root level to build overall insurance literacy of farmers to take informed decisions. 


  • Use of more technology for transparency and quick assessment of crop yield/loss for early settlement of claims.


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Read this release in: Manipuri , Tamil